AT&T Earnings: Brace For Impact

After a good day in telecom marked by the solid results released by peer Verizon (NYSE:VZ), AT&T (NYSE:T) will be the next U.S. giant in the space to report on its own 3Q performance. Quite a bit of the surprise factor might be absent from the print, however, as AT&T’s management has issued a partial pre-announcement in the wake of the season’s natural disasters, softness in legacy video subscription (well covered by Stone Fox Capital) and fewer handset equipment upgrades.

(Photo Credit: Business Insider)

The Street is betting on revenues of $ 40.1 billion, suggesting a -2% YOY decline that will be caused, to a small extent, by the U.S. storms and the earthquake in Mexico. Likely driving a larger piece of the drag will be legacy video, expected to see a record high, and a worrisome decrease in the subscriber base of 390,000. The projected strong user metrics on the DirecTV Now side of the business will probably not be enough to counter the DirecTV and U-verse headwinds, considering the lower per user revenue generated by the online platform. EPS is estimated to come in at $ 0.75, no lower than the earnings expectations from before the pre-announcement.

On the wireless side, and if Verizon can be used as a leading indicator, I would not be surprised to see margins dip in the YOY comparison. The Big Four carriers in the U.S. have been fighting a fierce competitive war that saw all players introduce unlimited postpaid plans in 2017 (Business Insider covered the plan comparison across the industry very well). As I have argued recently, the likely impact of these initiatives will be lower pricing and network cost pressures to support the large data services. On a more positive note, AT&T shareholders are probably hopeful to see postpaid net adds maintain the momentum gained in 2Q17, as well as churn at or around 1% – which would be in line with management’s October statement that it “continues to see low postpaid phone churn levels.”

Considered by me to be one of AT&T’s less-talked-about jewels, Mexico mobility could have a tough 3Q17 in the wake of the natural catastrophe in the country. But regarding this piece of the business, I continue to hold a long-term view that the runway is set for AT&T to continue to generate solid growth in the region.

My thoughts on AT&T stock

The last few months have not been a walk in the park for the giant Dallas-based telecom company. With headwinds hitting from many directions (at times literally so, in the case of September’s hurricanes), the stock has suffered a rarely seen -10% decline in a short period of only two weeks and is now back to February 2016 levels.


T PE Ratio (Forward) data by YCharts

Company/Ticker Forward P/E LT EPS Growth Forward PEG
AT&T (T) 12.2x 3.8% 3.3x
Verizon (VZ) 13.2x 3.3% 4.0x

The silver lining, however, is that T hasn’t looked this inexpensive in a while – since January 2016 on a forward P/E basis, to be more precise. Assuming that its dividends will be safe (check out this great article on the subject) and, better yet, will continue to grow in a near-straight line like they have over the past 30 years, the company’s impressive 5.5% trailing yield makes an investment in the stock look more like a convertible bond play. In other words, investors that buy T today collect on the very rich quarterly payments with the option of benefiting from the eventual appreciation in the stock price over time.

Call me a biased shareholder, but despite the known challenges, I find an investment in T at the current depressed levels a rare opportunity ahead of what I believe will be positive long-term catalysts for the company.

Note from the author: If you have enjoyed this article and would like to receive real-time alerts on future ones, please follow D.M. Martins Research. To do so, scroll up to the top of this screen and click on the orange “Follow” button next to the header, making sure that the “Get email alerts” box remains checked. Thanks for reading.

Disclosure: I am/we are long T.

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.


Startup CEO Arrested for Child Abuse, Assault, and Attempted Murder

News broke on Friday that Zain Jaffer, ex-CEO of mobile ads startup Vungle, was arrested for child abuse (including a charge of oral copulation of a person under 14), assault, and attempted murder. 

The company replaced Jaffer as CEO a day before the allegations were reported in the tech press. The San Mateo County Sheriff’s website indicates that an inmate named Jaffer is being held at the Maple Street Correctional Center in Redwood City, California. 

Jaffer was featured as part of Inc.’s 35 Under 35 Coolest Entrepreneurs package in 2014.

A Vungle spokesperson wasn’t immediately available. Earlier today, a company representative told VentureBeat: “While we do not have any information that is not in the public record at this point, these are extremely serious allegations, and we are shocked beyond words.” The charges are “obviously so serious that it led to the immediate removal of Mr. Jaffer from any operational responsibility at the company,” the rep told VentureBeat.

Jaffer’s next scheduled court date is Nov. 1, according to the San Mateo County Sheriff’s records.


It's Easier to Focus in a Coffee Shop Than an Open Plan Office, According to Brain Scans

Yesterday, the Harvard Business Review published an article asking why people feel they can focus better in a coffee shop than in an open plan office, even though both environments are noisy. 

The article cites research that people tend to be more creative in the presence of noise than in complete silence and that EKG readings reveal that “a certain level of white noise proved the ideal background sound for creative tasks.”  

Considering that white noise is fine and even beneficial,

“Why do so many of us hate our open offices? The quiet chatter of colleagues and the gentle thrum of the HVAC should help us focus. The problem may be that, in our offices, we can’t stop ourselves from getting drawn into others’ conversations or from being interrupted while we’re trying to focus. Indeed, the EEG researchers found that face-to-face interactions, conversations, and other disruptions negatively affect the creative process. By contrast, a coworking space or a coffee shop provides a certain level of ambient noise while also providing freedom from interruptions.”

I think that’s true as far as it goes, but there’s more going on here than meets the ear. Coffee shops (and coworking spaces) operate under different social systems than offices and workplaces.

For example, in a coffee shop, all patrons are created equal. There is significant social pressure to adhere to common-sense politeness, such as no telephone calls (you take it outside) and no loud talking.

By contrast, in an office, social pressure exists within an informal hierarchies of clout. While there may be rules–even posted rules–similar to the unspoken rules of coffee shop behavior, breaking those rules–and escaping censure for doing so–is a highly-visible and universally understood way to establish dominance.

Indeed, sexual harassment (especially when committed in the presence of underlings, as has been the case in many of the recent horror stories) is the most extreme form of this kind of status-establishing bad behavior.

Less heinous, though equally status-driven, behaviors plague most workplaces. For example, in a high tech firm a project leader might (consciously or subconsciously) hold a loud conversation in the middle of a shared work area simply to prove to everyone else that his project is more important than whatever they’re doing.

Is he being a jerk? Sure. But while people may resent it, if he’s got enough political clout he’ll not only get away with it but the fact he got away with it will emphasize and reinforce his status.  

Another difference between coffee shops and open plan offices is the nature of the conversations that you’re likely to overhear. 

In a coffee shop, there’s an infinitesimal likelihood that an overheard conversation will be relevant to your or your job. By contrast, in an open plan office any conversation is potentially relevant. As a result, your brain is going to keep half-an-ear cocked when anybody is talking.

Another big difference is your level of control. If you’re in a coffee shop and find the noise distracting, you can wear noise-cancelling headphones with a reasonable expectation that nobody will ask you to remove them.

In an open plan office, though, other people (especially those who believe they’re more important than you) feel empowered to catch your eye and demand your attention. They may even believe they’re doing the company a favor by pulling you away from your playlist and back into the real world.

In short, it’s not so much the noise that makes an open plan office such a miserable place to work, it’s the inability to escape the proximity of the petty and annoying behaviors of your coworkers.

One point that the HBR article entirely missed was that there’s a perfectly reasonable alternative to both open plan offices and coffee shops/shared work areas: working from home and using tools like Skype and Slack to control your interactions with your coworkers.

A Personal Victory

Anyway, while I’m on the subject, I’ll share a real-life experience of how I dealt with some status-driven annoying behavior back in the day. 

Early in my career, I worked for a company where everyone, even the C-level execs, had cubicles. While I found the environment distracting, I made the best of it by requesting a cubicle off the beaten path, next to two cubicles that were reserved for visitors, and therefore usually empty.

One day, however, a salesman sequestered one of the visitor cubicles and started making cold calls. (This was back before cell phones, so the only way to make calls was on a wired handset.) Normally, I’m sympathetic to salespeople but this guy was one of those fast-talking, loud-mouths who uses the same, lame script, over and over and over.

After about an hour of this, I’m about to lose my mind, so I pop my head over the partition and ask, politely, could he please keep it down. He gets all in my face about how his job is more important than mine and ends the conversation with a suggestion that I commit an unnatural act upon myself.

Fine, I say to myself. 

I wait until he goes to the restroom, go into his cubicle, unscrew the handset mouthpiece, remove the microphone, and replace the mouthpiece.  When he returns and resumes cold calling, everyone hangs up on him because they can’t hear anything he’s saying.

He eventually gets so frustrated that he calls technical support who, of course, also hangs up on him while he’s explaining the problem. Cursing, he goes to find somebody who can fix the phone.

While he’s gone, I replace the microphone.

In about fifteen minutes, he returns with a support engineer, who tests the phone, confirms it’s working properly, and then leaves, making it clear (in a voice of belabored patience) that he thinks the executive is either incompetent, crazy or both.

By this time, it’s lunch hour. The exec, still fuming, heads towards the cafeteria.

I go back into the cubicle and remove the microphone again.

The exec comes back, starts cold calling. Soon he’s so frustrated that smoke is practically coming out of his ears whilst I’m maintaining a innocent expression, all the while mentally ROFLMAO.

Finally, the salesman storms out of the building, never to return.

And I go back to work… with the satisfaction of a job well done.


Unorthodox CEO Blends 'Servant Leadership' Into a Winning Recipe

The question isn’t so much what Mike Rotondo will do for his company but, rather, just how far he is willing to go to support the franchise owners and employees that have turned the 600-plus Tropical Smoothie Cafes into a major player in the fast casual nutritional eating segment. 

A partial list includes the day he promoted the opening of a New York City store by handing out free smoothies to jaded Manhattanites. 

Or the time he bolstered morale at another store by donning a banana suit during a site visit.

Most recently, Rotondo went into the tank – a dunk tank, that is – to herald the grand opening of the chain’s 612th cafe in Wilmington, N.C.

“There is very little I wouldn’t do for this brand,” says Rotondo. “I’m kind of old school in that I don’t like asking someone to do something that I’m not willing to do myself.”  

The CEO has therefore been known on other occasions to clear tables, sweep floors and pitch in as needed should the pace unexpectedly pick up during visits to cafes spread across 43 states. 

“If you say a job is beneath you then there are very few jobs above you,” explains Rotondo, a native Illinoian who launched his food service career as a district manager for Wendy’s International.

Rotondo has embraced “servant leadership” to triple the number of Tropical Smoothie franchises during his five years at the helm. 

In the spirit of Tropical Smoothie, it is a model that strives whenever possible to blend management with transparency.  

Making nice with a gatekeeper, for example, is not a pre-requisite to getting a call through to the boss at Tropical Smoothie.

Because the boss, Rotondo,  passes his cellphone number along  to franchise operators, company officials and anyone in the system with reason to be in touch. 

He credits honesty with easing the burden of tough  decisions, such as a corporate determination that tied company-wide growth to an increase in the operator-subsidized national advertising budget.

 The Tropical Smoothie brass could have summarily doubled the advertising outlay for each franchise from one to two percent.

Tropical Smoothie chose instead to notify franchises of the change seven months in advance, a heads up that gave owners the opportunity to adjust the finances of each store accordingly. 

“We have to show people respect with our decisions,” Rotondo explains. “And we have to be out front from a communications standpoint.”

Rotondo is equally upfront about circumstances that transpire beyond the corporate suite. Now 55, he was on the cusp of moving from COO to CEO when a health issue threatened to derail his career if not  very existence. 

Rotondo now deadpans that a heart attack suffered by a top executive delivered an inconsistent message to the customers and employees of a brand with a menu emphasizing  “superfood” fruit blends, wraps and other nutritional items.

True to form, he seized the opportunity to lead by example Today, Tropical Smoothie employees are invited to join the CEO on daily and charity runs. The staff at the company’s Atlanta-area headquarters is moreover encouraged to avail themselves of on-site, free-of-charge fitness trainer.

His heart attack, says  Rotondo, had the unintentional consequence “changing lives around me.”

The lifestyle is also consistent with a company that appeals to is for health-conscious millennials – customers and, increasingly, franchise operators and employees alike. 

Rotondo rejects the perception that the 18- to 34-year-old  demographic is difficult to manage.  

What some construe as laziness, he sees as resourceful.

“Millenials know how to figure things out,” Rotondo says, citing young employees capturing work schedules and Power Points on smartphone cameras, a task he’s been known to undertake as a “Fred Flintstone with pencil and paper.” .  

Through trial and error, Rotondo has discovered that Millenials above all treasure flexibility and honesty.  

In that, they have much in common with the guy atop Tropical Smoothie Cafe.


Amazon to ship electronics in Brazil from third-party sellers

SAO PAULO (Reuters) – Inc began offering electronics from third-party sellers to Brazilian shoppers on Wednesday, expanding beyond books in the fiercely competitive e-commerce market in Latin America’s largest economy.

The long-awaited move will offer televisions, cell phones and laptops from hundreds of independent sellers on Amazon’s website in Brazil without involving the company in the tricky logistics that have hurt many online retailers in the country.

Alex Szapiro, Amazon’s country manager in Brazil, declined to say if there were plans for the company to stock its own electronics inventory or open a fulfillment center to ship third-party goods more efficiently, as it did simultaneously with the launch of independent sellers in Mexico two years ago.

“Each country has a different playbook,” said Szapiro in an interview with Reuters at Amazon headquarters in Sao Paulo. He helped launch the company’s Brazil business with e-books in 2012 after running operations for Apple Inc in the country for five years.

Shares of local e-commerce rivals MercadoLibre Inc, Magazine Luiza SA and B2W Cia Digital have fallen 14 percent, 17 percent and 20 percent, respectively, in the past week on concerns of heightened competition from Amazon.

Keeping pace with the local e-commerce market, Amazon will parcel purchases into as many as 10 monthly installments without interest, a practice the company started in Brazil for Kindle e-reader sales in 2014, then extended to Mexico and other markets.

Sellers will be paid up-front, minus a 10 percent commission to Amazon and fees of 19 reais ($ 6) per month or 2 reais per item. Szapiro called the 10 percent commission a “promotional” rate without saying when or how much it would eventually rise.

($ 1 = 3.16 reais)

Reporting by Brad Haynes; Editing by Lisa Shumaker


Here's Why Anyone Will Be Able to Develop a Computer Program 5 Years from Now

These days, while our grandparents struggle endearingly to send a text message or compose an email, we struggle to remember that the use of computers and smartphones wasn’t always intuitive.

Though we understand on an intellectual level that such objects are foreign to them, it’s hard to internalize; after all, most of us caught on to laptops and smartphones as soon as they became the standard.

But a few decades from now, will we be those clueless grandparents? Just as it’s become so natural and intuitive to use computer software, will our children and our children’s children think it’s equally as natural and intuitive to build it?

Back in high school and college, most of us tended to distance ourselves from the field of coding, assuming that it required too much specialized knowledge to tackle on even an elementary level. But that’s no longer the case today. Coding could easily become mainstream in the next few years, and we’ll probably all need to jump onboard regardless of our levels of experience.

Coding is more accessible than ever

Although self-taught coding isn’t new, it’s become easier and more realistic for the everyday person. Decades ago, teaching yourself coding was tedious and required an enormous amount of effort. You had to sort through physical textbooks and copy problem sets by hand, without many resources or available mentors to help you if you got stuck.

Nowadays, it’s different. First, there are more online coding courses available than anyone could count. Since each has a different approach, it’s easy to find ones that are suited for particular learning styles. The ever-popular Khan Academy offers coding courses with periodic mini-quizzes that students can use to test themselves and stay on track. Another program, Skillcrush, offers one-on-one office hours with the professor, as well as a 10-day coding bootcamp for those short on time.

Many of these courses are also specialized for individual skill levels and needs. While there are always those that cater to advanced coders, more and more are serving beginning coders, including older folks and kids.

Second, there are plenty of online resources to facilitate the coding process and supplement these courses. With the explosion of social media and the popularity of online forums, it’s easier than ever to connect with other coders and potential mentors for help. There are even sites that are intended specifically for this. HackHands, for example, makes programming experts available for live online chats 24/7.

Third, the coding process itself is also easier. No longer is it necessary to create simple units of code from scratch. Instead, existing bits of commonly used code components are accessible through open-source platforms like Bit. This means that rather than create each individual piece of code by hand, developers of all levels can put together lego-like building blocks of code, share their code with others, and use it across different projects.

These tools can serve as the infrastructure for building new applications with a simple composition of existing components. Since code is easier than ever to learn and requires less and less specialized knowledge to build, anyone will be able to create their own computer programs in the next few years.

Coding as a practical skill

The significance of all this is not just that programming will be more convenient for developers or even aspiring coding hobbyists. Even more importantly, the availability, accessibility, and increasing popularity of programming means that coding soon will become a mainstream practical skill–one that doesn’t require a university education to acquire.

This is about employability as much as it is about convenience. In the United States, university tuition is notoriously expensive. These days, the cost of private university courses, room, and board can amount to $ 60,000 per year. At the same time, American jobs are increasingly outsourced to countries with cheap labor. The result is that many Americans lack the basic practical skills so important to the American workforce. Instead, they invest in a strictly academic education which, though valuable, is notoriously expensive.

Now that it’s particularly vital for Americans to develop practical skills and now that university education is more expensive than most can afford, widespread knowledge of coding as a basic practical skill is both beneficial and feasible. The gig economy has made modern jobs more fluid and flexible than they were a few decades ago; career shifts and alternative forms of education are not only easier to pursue, but they’re also more culturally acceptable than they once were.

This isn’t to say that self-taught coding should replace traditional forms of higher education. Rather, it’s to say that it could be a viable option for people who can’t afford the high cost of a formal university education, who don’t have access to institutions of higher education at all, or who simply want to eliminate the pressure of having to pursue a degree in a technical field.

Learning to code, after all, is just as inexpensive as it is accessible, and it’s becoming increasingly standard to pursue on the side. In just a few years, building a computer program will be as normal as using one.


7 Things You Should Know Before Making a Major Career Decision

A friend of mine recently announced that his employer was closing the facility where he currently worked and moving its function to a larger facility about 600 miles away.

They gave him a choice: 1) relocate or 2) work remotely from home without relocating. Last I heard, he’d decided to relocate. His logic was as follows:

  1. As is typical in this sort of announcement, some of the coworkers at his facility were laid of rather than given a choice.
  2. The stated reason behind the relocation was to increase the amount of contact between employees in hopes of creating a more collaborative culture.
  3. Working from home would place him out of the collaborative loop and thus make him more likely to be laid off in the future.

While I understand his logic, I’m not sure he’s made the right decision.

Based upon what I’ve seen and experienced in the corporate world, there are seven essential truths to consider before making any major career decision.

1. There is no such thing as job security.

Millions of people have pursued their careers under the assumption that if they do the job required of them–and do it well–t they’ll remained employed and even get regular, reasonably-sized raises. And millions of people, having made huge sacrifices for their employers, have gotten fired anyway.

2. Always have options in your back pocket.

In my most recent book, Business Without the Bullsh*t, I recommend always having at least three different job opportunities under development, as well as a written plan for what you’d do, and who you’ll call, should you lose your job or decide to leave. If you’ve got options, your employer can’t bully. You make decisions based on opportunity not fear.

3. Know your true value to your company.

All companies, large or small, want to compensate you as little as possible while getting you to create (for them) as much value as possible. By contrast, it’s in your interest to get your compensation as close as possible to the value you’re creating, allowing for a fair profit to your employer. Essential question: how much would it cost to replace you?

4. Bad managers love management fads.

Thirty years ago, it was Total Quality Management; twenty years ago, it was Reengineering; ten years ago, it was Disruptive Innovation; today it’s the Collaborative Office. Popular management panaceas, at best, serve as corporate productivity taxes.  Worst case, they actively drive companies out of business. Be forewarned.

5. Do the numbers before you decide.

Consider the hidden costs before making any career decision. In my friend’s case, working from home eliminates commute time. Adding, say, an hour commute (both ways) to a 50-hour work week is the equivalent to a 20 percent pay cut! Similarly, relocating away from extended family could mean increased child-care costs. Always do the math!

6. Never make a career decision out of fear.

Fear is a useful emotion for making short-term decisions like “Should I try to pet that strange dog?” Fear is worse than useless, how, when making long-term decisions like “Where should I work?” or “What should I do for a living?” Making career decisions out of fear tends to land people in jobs that they hate and miss opportunities for jobs they’d truly enjoy.

7. The true measure of success is happiness.

As I’ve pointed out previously, it’s better to be happy and poor than miserable and rich. Of course, it’s easier to be happy when you don’t need to worry about money but past a certain point, it’s harder to achieve more happiness than more money. With this in mind, most people are happier when they work for home


​Windows Subsystem for Linux graduates in Windows 10 Fall Creators Update

More Windows 10

Interested in running Linux on Windows 10 with Windows Subsystem for Linux (WSL), but nervous about it being both a beta and only available in Windows 10 developer mode? Your worries are over. In the Windows 10 Fall Creators Update (WinFCU) WSL has graduated to being a Windows 10 feature that can be run by any user.

Tested for over a year, WSL on WinFCU is bringing many new features to this combination of the Linux Bash shell and Windows.

Besides WSL no longer being a beta or requiring users to be in developer mode, the new features include:

  • Install Linux distros via the Windows Store
  • WSL now runs multiple Linux distros
  • WSL comes to Windows Server & Microsoft Azure VMs
  • WSL now supports USB/serial comms
  • Miscellaneous fixes and improvements

Besides Ubuntu, the new WSL-supported Linux distros are SUSE‘s community openSUSE and its corporate SUSE Linux Enterprise Server (SLES). Fedora and other distros will arrive in the store shortly.

If you’ve previously installed WS, your existing “legacy” Ubuntu instance will continue to work, but it’s deprecated. To continue to receive support you should replace it with a new store-delivered instance. Without this, you won’t receive Canonical or Microsoft support.

To keep your old files, you should tar them and copy them to your Windows file system; for example: `/mnt/c/temp/backups` and then copy them back to your new instance.

In addition, instead of jumping through hoops to install Linux on Windows, you can install one or more — yes, you can have multiple distros on a single Windows 10 system — Linux distros from the Windows Store.

To do this, you must first enable the WSL feature in the “Turn Windows Features on or off” dialog and reboot. No, WSL is not active by default and yes, you must reboot.

After rebooting you simply search for “Linux” in the Windows Store, pick a version to install, hit install, and in a few minutes you’re good to go.

If you already have a Bash instance installed on WSL, you can start afresh with the lxrun /uninstall command. You run this command from the command prompt or PowerShell.

Besides being able to install multiple Linux distributions, you can simultaneously run one or more Linux distros. Each distro runs independently of one another. These are neither virtual machines (VMs) nor containers, and that means they need their usual system resources. I, for example, would only want them on systems with at least an additional 2GBs per instance of running WSL.

WSL itself requires only minimal system resources. Rich Turner, Microsoft’s senior program manager of WSL and Windows Console, wrote: “We don’t list [RAM requirements] because, frankly, we don’t have any of note! If you don’t install WSL, we add no RAM footprint. If you do enable WSL, there’s a tiny 850KB driver loaded briefly, and then it shuts down until you start a Linux instance. At that point, you load /init which launches /bin/bash. This causes the 850KB driver to load, and creates Pico Processes for init and bash. So, basically, WSL’s RAM requirements are pretty much whatever the RAM is that you need to run each Linux binary, plus around 1MB of working set in total.”

The Linux distros can also access Windows’ host filesystem, networking stack, etc. That means you should be cautious about changing files on the Windows filesystem.


You can now install Linux distros right from the Windows Store.

Why would you run multiple distros at once? Microsoft points out:

“This ability to run different Linux distros allows you to use the same tools, package manager/ecosystem, and environment that your production code will be running in. This results in less time wasted tracking down hard-to-find errors when it comes time to deploy your code. This allows you to, for example, use Edge/Chrome/Firefox on Windows, to view a website hosted on Apache on Ubuntu, that talks to a REST service running on openSUSE … without having to punch holes through the firewall when testing locally, because all these processes run above the firewall, alongside one another!”

Linux developers will be pleased to find that USB serial comms are now supported. This enables your shell scripts and apps to talk to serial ports.

WSL also now supports mounting of USB-attached storage devices and network shares. That’s the good news, The bad news is it only supports the NT filesystem IO infrastructure. In other words it only supports FAT/FAT32/NTFS formatted storage devices. Want *nix file systems? Microsoft encourages you to upvote and/or comment on the associated UserVoice ask.

Digging deeper into the new improvements, under the hood WSL on WinFCU now includes:

  • Improved TCP socket options inc. IP_OPTIONS, IP_ADD_MEMBERSHIP, IP_MULTICAST, etc
  • /etc/hosts will now inherit entries from the Windows hosts file
  • xattr related syscalls support
  • Fixed several filesystem features and capabilities
  • Improved PTRACE support
  • Improved FUTEX support
  • chsh, which enables you to change shells, now works. This enables you to use your favorite shell directly. Shell startup file other than “.bashrc” will now execute.

The following syscalls were added for the first time during the FCU cycle:

  • Prlimit64
  • getxattr, setxattr, listxattr, removexattr

As expected, WSL is also on its way to Windows Server and to Microsoft Azure Windows VM instances. This will make WSL even more useful for sysadmins.

All these improvements have made it even easier for developers and system administrators to run Linux shell commands on Windows. While this isn’t very useful for ordinary desktop users, for serious IT staff it’s a real step forward, making Windows more useful in a server and cloud world that’s increasingly dominated by Linux. Even on Azure, over a third of VMs are Linux.

With WSL, most Linux shell tools are at your command. These include: apt, ssh, find, grep, awk, sed, gpg, wget, tar, vim, emacs, diff, and patch. You can also run popular open-source programming languages such as python, perl, ruby, php, and gcc. In addition, WSL and Bash supports server programs such as the Apache web-server and Oracle’s MySQL database management system. In other words, you get a capable Linux development environment running on Windows.

While you can run Linux graphical interfaces and programs on WSL, it’s more of a stunt than a practical approach at this time. Of course, with a little work…

How does WSL work? Dustin Kirkland, a member of Canonical’s Ubuntu Product and Strategy executive team, explained: “We’re talking about bit-for-bit, checksum-for-checksum Ubuntu ELF binaries running directly in Windows. [WSL] basically perform real-time translation of Linux syscalls into Windows OS syscalls. Linux geeks can think of it sort of the inverse of ‘WINE‘ — Ubuntu binaries running natively in Windows.”

What matters now is that WSL works very, very well. If you want.

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Tracking the Customer's Choice with the Help of Technology

Technology is a boon to the people of the present era and it is giving out some of the best outcomes of every single search. Everybody at present days doesn’t get out for shopping because the online platform has got all the business-backed up in there. Everything from shopping for groceries till profit making everything is available in online. It is just people’s mindset to buy something in real time or in online. According to the reports, most of the population have started buying in online which is making everything simple.

Know your customer likes

Every product or business has got a set of customer attraction. The first gap between the customer and the producer happens without knowing their interests and that gap can be filled up with the help of attribution marketing. The special skills of marketing which is attracting the people in various areas like covering their attention in social media page, search results and Pay per Click. To manage the attention of people there is a need for a tool which helps to reduce the man work in a short span of time.

The exact tool

A tool can necessarily solve all the problems which can surely reduce the human work. The tool gives the proper machine learning which can help the investors to spend only a limited amount of money for marketing. The tool helps to clear off the doubts where the money can be invested. Choosing some of the better tools for can minimize the work burdens which are associated with finding the choice of the customer. The tool helps to analyze whether first click or last click gives the right channel of sale. Only a tool can clearly understand and give out the output of attribution model without taking too much of time. Even the tool is used to track the offline conversions and manage everything effectively.

The business people can surely understand exactly how much amount of money should be provided for every single channel without any time delay. The working time of the business people is reduced with the help of utilizing the tool which can give fast working results in a short span of time. Just let your Marketing Campaigns begin with the availability of the best tool in the market which comes with affordable prices.

Investing money for business is really a big thing and people need to know where the profit can come from. The highly intelligent tool can really help people to identify where more customers are buzzing and give out the right solution for investment. Everything becomes quite simple with the help of internet and even tracking the customer’s choice of products can be found with the tool. There are several models in tools choose your need and track the choice and liking of your customer without any issues. Every single touch point inside your website or page can be tracked perfectly with the help of tools and thus it can give the clarified data form for where to invest more and gain profit.

Get started ahead

The start which your company is about to make should begin with better out-coming results. The tools give the best start which you have always wanted. It gives an idea for where to fund and where to advertise much better with the inauguration of marketing campaigns and other solutions for developing your business without any delays. Know your customer with the advanced attribution marketing tool which is now available at cost-effective prices. Knowing your customer can simply happen with the help of tool which can leverage your business to lofty heights. The tool helps to

·         Capture

·         Evaluate

·         Assess

Every single piece of data which your business has got and try to channel that into profit within a short span of time. Optimizing your business revenue becomes so simple with the help of such kinds of better tools which are available at online. Use some of the cool trafficking methods to track your business in the better way. It is far better for your business to get upgraded in various ways and travel down the business path with profit-seeking techniques.

Path to success

The path to successive sales can easily happen with one of the best tools for attribute marketing in the present day. Even cross-domain or cross sites can be covered with the help of tools. The tools are the better and easy to implement. They are an easy way to follow up the work. Even a genuine tool can surely store 90 days of backup for customer’s touch point are saved. It is very simple for business people to implement money where your clients are spending time and increase the sale without losing time. Implement money on the best tools which are now available in online and bring out better benefits for your business.   


6 Rules You Must Know for Using SEO and SEM to Grow Your Business

If you’re managing a business, you know how important a web and mobile presence is. Whether you’re selling tacos, tiaras, or terabytes, customers need to be able to find you.

You’ve probably dipped your toe into the complex world of organic or “free” search, also known as Search Engine Optimization (SEO), and paid search, also known as Search Engine Marketing (SEM). But what do you really need to know about SEO and SEM?

I spoke with SEO/SEM expert Andrew Shelton, founder of the digital marketing agency Martec360, who gave me six rules that you need to pay attention to right now if you want to increase your sales through search:

1. Mobile is king

Need evidence of the importance of mobile? Some 96% of smartphone owners use their device to get things done. About 70% of smartphone owners use their phone to research a product before purchasing it in a store. Half of all web traffic comes from smartphones and tablets.

Furthermore, Google has begun to make its search index “mobile-first.” That means that Google will primarily index mobile content and use that to decide how to rank its results.

2. Paid search pays off on mobile

On mobile, paid search (SEM) is increasingly paying off. Shelton says he used to tell his clients to focus on free search (SEO) but with users putting mobile first, the continuum has changed.

“The greatest return on investment is email,” Shelton says, “because you have those customers in house. But paid search is next.” He estimates that paid search spending went up by factors of 25% to 50% in 2016.

3. Have a solid content strategy

The old adage is the new adage: “Content is king.” You need high-quality content for your website if it’s going to compete in the free search business. You can’t go about that blindly.

Consider what customer problem you’re solving. What customer questions can you be answering?

Do you have a mechanism for customers to ask questions? There could be a wealth of ideas for blog posts, FAQs, and buyers’ guides right there.

4. Social media is worth your return on investment

Social media can be vexing for many businesses. You definitely have to perform a cost-benefit analysis on it. Spending six hours a day sending out tweets that don’t lead to conversions is going to be a losing proposition.

Treat social media as “an engagement with an ongoing conversation with your customers,” Shelton recommends. “It’s not just for selling.”

In fact, if your social media channels are too hard-sell, they’ll be counter productive. You have to create value. Tools like Hootsuite, Falcon.IO, and Curalate can help.

5. Manage your online reputation

According to Shopper Approved, an app that helps its clients collect online ratings and reviews, 88% of all consumers read online reviews to determine whether a local business is a good business.

All of those reviews are part of the SEO equation. They can help you, or they can hurt you. But an app like Shopper Approved can help push more positive reviews where you need them.

6. Measure and monitor your progress

The only way you’re going see your business grow exponentially through SEO, SEM, and social media is to measure what you’re doing. You have to know where you’re starting, set some benchmarks, and monitor your progress.

Install Google Analytics. There is a plethora of other e-commerce tools you can use for analysis. Data is your friend. Get used to swimming in it.

And if you need help, find a consulting firm that understands your customer and your goals.

Just remember, effective search is process. You won’t get it right the first time. But you’ll get better at it with everything you learn.

About the author:

Kim Folsom is the Founder of LIFT Development Enterprises–a not-for-profit, community development organization with a mission to help underserved, underrepresented small-business owners – and Co-Founder and CEO of Founders First Capital Partners, LLC, a small business growth accelerator and revenue based venture fund. Learn more about Kim and her company’s mission to help grow and fund 1000 underserved and underrepresented small businesses by 2026 via their Founders Business Growth Bootcamp program at



Tesla Fires Hundreds of Workers After Their Annual Performance Review

They’re not layoffs, the automaker says.

Electric automaker Tesla Motors fired hundreds of employees this week, including workers at its Fremont, Calif. factory and corporate managers, as it tries to solve production problems for its recently released Model 3.

An estimated 400 to 700 people were dismissed this week, according to a San Jose Mercury News report published Friday afternoon. That’s between 1% and 2% of the company’s more than 33,000 employees. Former and current employees told the Mercury News that little or no warning preceded the dismissals.

A Tesla spokesman would not confirm that number but told Fortune that the move follows its annual performance reviews, which typically involve both involuntary and voluntary departures.

“Like all companies, Tesla conducts an annual performance review during which a manager and employee discuss the results that were achieved, as well as how those results were achieved, during the performance period,” a Tesla spokesman said in an emailed statement. “This includes both constructive feedback and recognition of top performers with additional compensation and equity awards, as well as promotions in many cases. As with any company, especially one of over 33,000 employees, performance reviews also occasionally result in employee departures. Tesla is continuing to grow and hire new employees around the world.”

Tesla insists that the losses are not layoffs and that it plans to backfill the positions. That’s likely accurate, at least for jobs in California. State law requires companies to notify employees of layoffs through its WARN notification system. There are no records of new layoffs from Tesla. About 200 Tesla and SolarCity employees in the company’s Roseville, Calif. offices were notified Aug. 30 that they would be terminated.

The latest cuts come as the automaker tries to fix bottlenecks on the production line for its Model 3, an all-electric model designed to appeal to the masses. Earlier this month, Tesla reported that it produced 260 Model 3 cars in the third quarter, of which it has delivered 220. That figure is far less than CEO Elon Musk’s prediction that Tesla would produce more than 1,600 of the vehicles by September.

In July, Musk tweeted a production update for the Model 3, saying the car had passed all regulatory requirements ahead of schedule. After announcing that the first 30 customers would receive the Model 3s on July 28, Musk wrote, “production grows exponentially, so Aug should be 100 cars and Sept above 1,500.”

Altogether, Musk said that third quarter production numbers for the Model 3 would be around 1,630 vehicles—a prediction off by 84%.

A Wall Street Journal report published earlier this month revealed that Tesla workers were assembling Model 3 vehicles by hand until at least early September. One of the “bottlenecks” Musk alluded to was a process that involved positioning and welding body panels by hand, rather than by precision robots, according to workers interviewed by the Journal.

Musk recently delayed the unveiling of an electric semi-truck until Nov. 16 so the company can focus its attention on production problems with its new mass-market car, the Model 3.


Tim Cook Says Learning How to Code is More Important than English as a Second Language

The Apple CEO said coding should be “required in every public school in the world.”

According to Apple aapl CEO Tim Cook, English may be a global language, but it’s more important to learn how to code.

“If I were a French student and I were 10 years old, I think it would be more important for me to learn coding than English,” Cook told French news outlet Konbini while in the country to meet with French President Emmanuel Macron, CNBC reports.

“This is a language that you can [use to] express yourself to 7 billion people in the world,” Cook said, adding that coding should be “required in every public school in the world” and should not be seen as a specialized skill.

“It’s not just for the computer scientists. It’s for all of us,” Cook said.

Acquiring coding skills makes financial sense, too. According to a report by job search network Glassdoor, more than one-third of high-paying jobs require some computer programming skills.

Last month, the Apple exec told Fortune about how the company developed the programming language Swift to encourage students of all ages to learn to code.

“All this curriculum stuff is free. Anybody can have it that wants it around the world. We’ve done it in multiple languages,” he said.


Facebook will help investigators release Russia ads, Sandberg tells Axios

WASHINGTON (Reuters) – Facebook Inc (FB.O) Chief Operating Officer Sheryl Sandberg said on Thursday the company was fully committed to helping U.S. congressional investigators publicly release Russia-backed political ads that ran during the 2016 U.S. election.

“Things happened on our platform in this election that should not have happened,” Sandberg said during a interview in Washington with the Axios news website. “We told Congress and the intelligence committees that when they are ready to release the ads, we are ready to help them.”

The live interview was the first by a senior Facebook executive since the company disclosed last month it had found some 3,000 politically divisive ads believed to have been bought by Russia in the months before and after the presidential campaign.

The interview with Sandberg came during a multi-day visit to Washington that included meetings with U.S. lawmakers. On Wednesday, she met privately with the leaders of the House Intelligence Committee’s Russia investigation.

Sandberg’s outreach comes as the social media giant and other major internet firms, including Alphabet’s Google (GOOGL.O) and Twitter (TWTR.N), are on the defensive as they try to limit the fallout from a torrent of new revelations about how Moscow sought to use their platforms as vehicles to sow discord in the United States and to influence the election.

Sandberg told Axios the company began hearing rumors of Russian attempts to use the platform to spread propaganda around election day last November, but did not give a precise timeline about when the company began its review.

Sandberg said she supported the public release of those ads, and the pages they were connected to. Information about how the ads were targeted toward specific kinds of users would also be released, she said.

Asked if Facebook contributed to Democratic candidate Hillary Clinton’s defeat last year, Sandberg, an open Clinton supporter during the campaign, did not answer directly, but said it was important the website was “free from abuse” during any election in any country.

But Sandberg acknowledged the company had erred in how it handled the issue of foreign interference last year.

”It’s not just that we apologize. We’re angry, we’re upset. But what we really owe the American people is determination“ to do a better job of preventing foreign meddling,” she said.

“We don’t want this kind of foreign interference” on Facebook, Sandberg added. “Any time there is abuse on our platform, it troubles us. It troubles us deeply.”

She said the company had been too permissive at times in terms of how advertisers are allowed to target users, and that Facebook did not want to allow ads that may be “discriminatory.”

Still, Sandberg said it was important to protect “free expression” on Facebook. Had the Russian ads been bought by legitimate accounts instead of fraudulent ones, many would have been allowed to run on the site, she said.

She also criticized Twitter’s decision this week to remove a campaign video from Republican Representative Marsha Blackburn, who is running for Senate in Tennessee. Twitter took down the video, saying a remark Blackburn made about opposing abortion was inflammatory, but later recanted.

“In that ad, there are a lot of things that people don’t like, that I don’t like … But the question is, ‘Should divisive political or issue ads run?’ Our answer is yes, because when you cut off speech for one person you cut off speech for all people,” she said.

Sandberg said the company wanted other internet firms to work to make ad purchases more transparent, but said Facebook was still talking about the issue with lawmakers who want to introduce legislation on the topic.

Representatives from Facebook, Google and Twitter are expected to testify about Russian influence at hearings before the Senate and House intelligence committees on Nov. 1.

Additional reporting by Makini Brice; Editing by Bernadette Baum


Movies Anywhere Lets You Watch All Your Films in One Place—Finally

You stocked up on iTunes digital movies a decade ago because it was the only game in town. You’ve got a handful of favorites on Google Play, because at some point you switched to Android. And you stash some classics on Amazon Video, thanks to that one holiday blowout sale you couldn’t resist.

A far as hardships go, having your movie collection sprinkled among a few different digital retailers ranks somewhere below “poured skim instead of half-and-half.” Still, it’s frustrating to have to dig through two or three or four digital shelves to find what you’re in the mood for right now. You also, for the most part, won’t have to anymore, thanks to Movies Anywhere.

The promise of Movies Anywhere is deliciously simple. Once you create an account, any movie you buy from one of five major studios will show up in the app, available on Android, iOS, Roku, and pretty much any other streaming device you can think of.

The promise of Movies Anywhere, which launches right now, is deliciously simple. Once you create an account, any movie you buy from one of the five major studios—Paramount and Lionsgate are holding out, apologies to Transformers fans—will show up in the Movies Anywhere app, available on Android, iOS, Roku, and pretty much any other streaming device you can think of. And before you seize up from a bad flashback to Ultraviolet, the floundering DRM scheme that studios have pushed for years, know that those movies will also all show up automatically in your iTunes, Amazon Video, Google Play, and Vudu accounts, if you choose to link them.

Not only that, but the service applies retroactively. Meaning that if the movies in your various digital libraries are among the 7,300 available today on Movies Anywhere, they can be in all of your libraries at once. Switching between Amazon and iTunes for whatever reason? It’ll know where you left off.

Technically, Movies Anywhere already existed; Disney launched it three years ago, but only for Disney (or Disney-owned, like Marvel) movies. It also, like so few things in this life, works exactly as advertised; films bought on one platform pop up on all the rest instantly. That reliability comes from Disney’s KeyChest technology, which creates a sort of digital locker for all of your purchases outside of the traditional retail outlets. Think of it like your own personal, movie-only Dropbox bin, which you can tie to your iTunes, Amazon Video, Google Play, and Vudu accounts.

Or you can just use the Movies Anywhere app, which Movies Anywhere general manager Karin Gilford hopes will become a destination unto itself, not just air traffic control. “It’s feature film-focused,” says Gilford. “Everything from the search, the browsing, it’s all based on that user experience.”


In other words, it strips away all the clutter that you find in other places: the original series, the streaming options you may or may not care about. If you’re in the mood for just a movie you love enough to already own, the argument goes, Movies Anywhere can get you there better than anything.

There’s no real downside for consumers here; the only question is how many people buy enough digital movies to care that Movies Anywhere exists in the first place.

“I think what they’re doing is just giving consumers more options in the market. Hey, great. There’s consumers who want more options,” says Dan Rayburn, a streaming media analyst with Frost & Sullivan. “Are they providing a service consumers are clamoring for? No, not that I’ve seen.”

The numbers bear that out somewhat. Subscription streaming revenue outpaced digital movie purchases by a factor of three in the first half of 2017, according to the Digital Entertainment Group, an industry organization. Still, those sales are increasing year over year. And Gilford argues that streamlining the buying—and storing—experience can only help.

“Purchase and streaming have always been side by side,” says Gilford. “It’s a formidable revenue stream. Whenever you can improve the consumer experience, you see things.”

That’s especially true if Movies Anywhere manages to win over the two studio holdouts, and adds more retail partners to its stable. It also doesn’t hurt that Movies Anywhere is offering as many as five free movies—Ice Age, last year’s Ghostbusters, Big Hero 6, Jason Bourne, and The Lego Movie—for people who join and link at least two retail accounts.

And even without the freebies, Movies Anywhere gives a certain kind of movie fan—the kind that likes to shop for deals, the kind that hasn’t gone all-in on one ecosystem, or might want to explore another—freedom that was previously unimaginable outside of Disney flicks. It may not save digital movie sales from streaming, but it might just save you some hassle.


Mark Zuckerberg Apologizes For Facebook’s Puerto Rico Virtual Reality ‘Tour’

The Facebook CEO said he meant no offense by the promotional live-stream.

Facebook CEO Mark Zuckerberg apologized on Tuesday after his promotion of the company’s new virtual reality platform via a digital jaunt through hurricane-ravaged Puerto Rico came under fire.

Some critics said the live-stream “tour” was exploitative and akin to disaster tourism.

Amid mounting backlash online, Zuckerberg posted a brief comment below his VR live-stream saying he meant no offense. The 9-minute video is still on Facebook.

“One of the most powerful features of VR is empathy,” the 33-year-old CEO said. “My goal here was to show how VR can raise awareness and help us see what’s happening in different parts of the world.”

“I also wanted to share the news of our partnership with the Red Cross to help with the recovery,” he added. “Reading some of the comments, I realize this wasn’t clear and I’m sorry to anyone this offended.”

On Monday, Zuckerberg’s cartoon avatar toured Puerto Rico—along with Facebook’s head of social VR Rachel Franklin—to demonstrate the company’s new social app, Facebook Spaces. Puerto Rico is struggling to recover from the devastating impact of Hurricane Maria on Sept. 18 that lashed the island just two weeks after another catastrophic hurricane made landfall. Almost 84% of the island remains without electricity and 37% have no access to drinkable water.

Zuckerberg’s comments in the promotional live-stream also drew fire. After surveying some of the flood damage, he said: “one of the things that’s really magical about VR is that you can get the feeling you’re really in a place.” At one point in the video, Zuckerberg and Franklin’s avatars high-five with flooded Puerto Rican homes in the background.

While the live-stream was hit with criticism, Facebook has earned plaudits for its donations to the recovery efforts. The company gave $ 1.5 million to support relief work being done by the World Food Program and Net Hope, a consortium representing dozens of nonprofits and tech companies. Facebook also sent a “connectivity team” to supply emergency telecommunications support after the hurricane knocked out most of the island’s communications.


The New 'Star Wars: The Last Jedi' Trailer is Here AT-AT Last

“When I found you,” growls an ominous narrator at the opening of the new trailer for The Last Jedi, “I saw raw, untamed power.” That’s the voice of Snoke, the little-seen baddie from 2015’s smash Star Wars sequel The Force Awakens, and while he’s likely talking about his dark-helmeted protege Kylo Ren, he may as well be describing this trailer itself, which is full of ominous, brutal imagery: There are lumbering, AT-AT-like assault transports—which are rumored to be dubbed Heavy Assault Walkers—stomping across a plain; the flaming ruins of Luke Skywalker’s decimated Jedi school; and, most terrifying, the sight of Ren (Adam Driver) aiming his custom-TIE fighter at a ship carrying his mother, General Leia (played by the late Carrie Fisher). We always knew writer-director Rian Johnson’s entry in the Star Wars saga was going to be a trip to the dark side, but this trailer is near-empirical proof that Last Jedi is going to turn the Star Wars universe upside down.

Only a heartless cad like Salacious B. Crumb—rest in power, lil’ B!—would find much to chuckle about here. Still, there are plenty of thrilling mini-moments to found, including scenes of Rey (Daisy Ridley) developing her lightsaber skills under the cautious eye of Luke Skywalker (played by Mark Hamill, whose grizzled, island-loner seems a smidge familiar. We also get to see Finn (John Boyega) take on super-‘trooper Captain Phasma (Gwendoline Christine). Finally, there’s a closer look at Snoke himself, who’s spotted using his own powers on Rey—the young warrior who, by the trailer’s end, appears to be turning to advice from none other than Kylo himself. Will she stick with Luke, or kick-start an evil new Ren-aissance? We’ll find out when Star Wars: The Last Jedi opens December 15.


Famed Architect’s Lawsuit Against Google Just Got Much More Serious

Eli Attia alleges he wasn’t the only one mistreated by the search giant.

A long-running lawsuit filed against Google by a prominent architect has just gotten much broader.

Last week, the Superior Court of California granted a motion adding racketeering charges to the civil case being pursued against Google by Eli Attia, an expert in high-rise construction. Attia claims Google stole his idea for an innovative building design method – and now he wants to prove that it does the same thing frequently.

Attia’s suit was originally filed in 2014, four years after he began discussions with Google (prior to its reorganization as Alphabet) about developing software based on a set of concepts he called Engineered Architecture. Attia has said Engineered Architecture, broadly described as a modular approach to building, would revolutionize the design and construction of large buildings. Attia developed the concepts based on insights gleaned from his high-profile architecture career, and has called them his life’s work.

Google executives including Google X cofounder Astro Teller came to share his enthusiasm, and championed developing software based on Engineered Architecture as one of the company’s “moonshots.” But Attia claims the company later used his ideas without fulfilling an agreement to pay to license them.

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Attia’s suit names not just Google, but individual executives including founders Larry Page and Sergey Brin. It also names Flux Factory, the unit Attia’s suit alleges was spun off specifically to capitalize on his ideas.

Speaking to the San Jose Mercury News, Attia’s lawyer claims Google told Attia his project had been cancelled, “when in fact they were going full blast on it.” Flux Factory is now known as Flux, and touts itself as “the first company launched by Google X.”

Attia’s suit will now also seek to prove that his case is representative of a much broader pattern of behavior by Alphabet. According to court documents, the motion to add racketeering charges hinged on six similar incidents. Those incidents aren’t specified in the latest court proceedings, but Alphabet has faced a similar trade-secrets battle this summer over X’s Project Loon, which has already led to Loon being stripped of some patents.

The idea of racketeering charges entering the picture will surprise many who associate them with violent organized criminals. But under RICO statutes, civil racketeering suits can be brought by private litigants against organizations and individuals alleged to have engaged in ongoing misdeeds. The broader use of racketeering charges has slowly gained ground since the introduction of RICO laws in the 1960s, with some famous instances including suits against Major League Baseball and even the Los Angeles Police Department.


7 Reasons You Don't Need a College Degree to Earn Big

There are few college degrees that pave the way to six figures. It can happen – but you can also earn a six-figure income without ever going to college. I’m a proud college dropout, and was earning over $ 200,000 a year as the head of SEO at while my friends were working on their degrees. I went on to build and run successful companies and help others grow theirs. And I’m certainly not an anomaly in the world of business success.

Bill Gates, Mark Zuckerberg, and Lady Gaga are all wildly successful – all without college degrees. According to reporting from the Washington Examiner, 68% of Americans don’t have a bachelor’s degree. My position here isn’t to say college degrees are worthless or can’t be beneficial – just that they aren’t necessary to achieve success.

Here are 7 reasons you don’t need a college degree to earn big.

1. Online Learning Turns You Into an Expert

There was a time when going to college and securing a master’s was a ticket to big paychecks. But as we’ve learned during the ups and downs of our economy, a degree doesn’t always unlock doors to more opportunities.

You could end up needing an MBA for the work you want to do, but you should also stop to challenge your assumptions before signing up for four years of tuition and student debt. Do you really need a four-year degree to be a coder? Or could you take classes from Codeacademy or Dev Bootcamp to learn web development? Chances are you can find courses online for anything you want to be an expert in. Consume every course and all the content you can find to advance your own career.

2. It’s Possible to Start Consulting Right Now

There is no degree required to become a consultant; and you also don’t need to be a foremost expert to launch your services. Work on identifying areas where you can solve someone else’s problems. Look at B2B services you can offer, from email marketing to on-site optimization.

Just don’t fall into the trap of believing that you don’t know enough to consult. If you know more than your clients and can coach them in useful ways that solve their problems, then you can look to consulting. I have years of experience in content marketing and consult entrepreneurs on how to grow their businesses. Although I’ve had a lot of success, there are plenty of other people out there who are more experienced and earn more than me. There’s room for people with various strengths and niches in any industry.

3. You Can Invest in Real Estate Without a Degree (or a Lot of Money)

There is no degree required to start investing in real estate. And I’m not just talking about flipping homes or buying rental property. You can start investing in commercial real estate without a degree or even much money.

Crowdsourcing has become a popular way to do this. Sites like Realty Mogul offer investment opportunities for a few thousand dollars. Their properties range from hotels to office buildings to storage units. As you build up your portfolio and earn more money, you can look to commercial real estate opportunities in your own community to make a name for yourself.

4. There Are Still Plenty of Jobs That Pay Six Figures Without a 4-Year Degree

It’s really not necessary to go to college to earn six figures in this day and age. A degree isn’t required for air traffic controllers, yet they have the opportunity to earn six figures within a few years. Real estate brokers and technical writers also don’t need degrees to work in their fields, yet they have high earning potential.

You can also lean on your own skills to earn six figures. That’s how I ultimately went from college dropout to high earner. Or you can get inspired by Millennial Lauren Holliday, a college dropout turned waitress turned self-taught full stack marketer who landed a dream job and started earning six figures. She later went out on her own to earn more and help others learn more about marketing.

5. Student Debt Can Crush Your Dreams

You don’t need a degree if it’s going to put you far into debt with no light at the end of the tunnel. Student loan statistics are grim with over 44.2 million Americans saddled with student loan debt. According to research from Student Loan Hero, the delinquency rate is 11.2% and the average monthly student loan payment for borrowers 20 to 30 years old is $ 351.

Think about what would happen if you didn’t have that loan payment. You could invest that $ 351 into your own business or self-learning to create the kind of career and income stream you’re looking for.

6. Your Degree Could Be Useless By the Time You Graduate

I’m not necessarily against college, but it is a risk. You’re putting a lot of time and money into a degree that may or may not be obsolete by the time you’re ready to use it.

However, even if the degree itself is still useful in opening some doors, it doesn’t mean you’re really ready for the job market. Technology and business processes and trends age quickly. It’s hard to keep up with changing trends when you’re stuck behind your textbooks for four years.

7. You Don’t Learn Grit in College

Author and psychologist Dr. Angela Lee Duckworth says grit can determine success. In her popular TED talk, she explained: “Grit is passion and perseverance for very long-term goals.”

Grit isn’t learned from textbooks and taking tests. It’s learned from being out there in the world and struggling through challenges and figuring out how to make things work. Your own grit might be learned through launching a freelance career or startup, securing funding for your business or traveling the world and working remotely.

At the end of the day, you don’t need a degree to give you permission to succeed and earn big. While a degree may be useful to help grow your skills and make new connections, it is not a prerequisite to becoming a leader in your industry. Success is a mindset and the result of hard work – and it can absolutely be achieved without your learning credentials in hand.

Did you skip out on college and achieve big success? Let us know about your experience by leaving a response below:


Amazon: Hitting Where It Hurts, The Periphery

There are mixed views on whether Amazon (NASDAQ:AMZN) is really killing it in grocery retail. At first glance, it does seem like opinions on both sides have merits. And since these opinions are mutually exclusive, it is easy to wonder about this discrepancy. I gave it a lot of thought and finally arrived at the following two conclusions. One, in grocery retail, Amazon may not have a big figure to gloat about so far. Two, traditional grocery chains are probably taking a big hit, and this is unlikely to be ascertained anecdotally.

Location, Location, Location

The oft heard aphorism location, location, location goes as well for grocery retail chains as it does for real estate. After years of competing and exhausting many options to differentiate themselves, grocery retail chains, the new and the old, are back to square one incurring more costs than ever. If one grocery store offers free parking, the other does too. If one offers a money-back guarantee, the other does too. In effect if one grocery retail store offers something to the customer, a competitor nearby is willing to match that experience. Therefore, grocery retail chains are now left with just three attributes to differentiate themselves.

First is the format. A hard discounter will have less than 2,000 SKUs whereas a supermarket will have 40,000. Retailers are institutionalized in one format or the other. For instance, a Kroger (KR) is not going to turn itself into a warehouse club like Costco (COST). Since, the format of the store generally remains the same, it has no influence over the earnings result year after year.

Second is marketing an effective price perception strategy. Just to make it clear, price perception is different from price. As summed up exceptionally in this HBR article, Amazon uses price as a psychological weapon and uses it better than anyone else in the game. Apparently Amazon sells the top moving items at a lower price compared to other retailers. Since, these products have high velocity, the perception that Amazon is cheaper is stuck. The study consistently found that other products were priced expensive relative to competitors.

And third is the location. A Kroger store in Chapel Hill, North Carolina, is not going to compete with an Aldi in Medford, Massachusetts. At competitive locations, price perceptions can feed into the impact on store earnings. And of all the three attributes, none of them affects quarter-to-quarter fluctuations in earnings more than location.

Why anecdotal verification can mislead investors?

In the past, when I wrote two bearish articles on Kroger, readers gave me stick arguing that competitive threats are not borne out by anecdotal evidence at company stores. Indeed, but why does anecdotal evidence defy numbers reported by the company? I think I have an answer but would like to add a caveat that this explanation is theoretical at this stage and was inspired by my reading of Foxall’s Consumer Behavior Analysis. I have not independently verified it, but readers can let me know what they think about my analysis.

Most grocery stores are more or less certain that customers located nearby will visit their store instead of a competitor’s. Saving a dollar on groceries is often not worth the time and gas expended on a trip to a distant store. Especially when stores hardly offer any differentiation. But for people located relatively distant from two different retail chains, the incentive to defect is higher. This number could be minuscule. But we are not talking about a 10% dip in sales or traffic. In fact sales growth and traffic are dipping just marginally at traditional chains. If Whole Foods succeeds in snapping just these customers at the sideline, and who were previously shopping at a Kroger’s or Wal-Mart (NYSE:WMT), the impact could be substantial. Here’s how.

Importance of volumes and impact on stock

The table below highlights the importance of volumes for grocery retail chains. The return on equity of all companies is driven by asset turnover and leverage. But what has an outsized effect on annual changes in ROE and short-term movement in stock is the net income margin. Even a 50 basis point decrease or increase in net income margins results in approximately -+10% change in the return on equity figure. And because of the high fixed costs, small changes in sales often see net income growth going from green to red.

Stock Net Income Margin Asset Turnover Leverage Return on Equity
Costco 1.98% 3.56 2.75 20.71%
Wal-Mart 1.70% 3.28 5.45 28.98%
Sprouts (NASDAQ:SFM) 3.07% 2.82 2.14 16.62%
Kroger 2.81% 2.44 2.56 16.65%
Amazon 1.74% 1.83 4.32 14.52%
Target (NYSE:TGT) 3.94% 1.78 3.42 22.89%

Therefore, if people at the sideline show up at, say, a competitor of Kroger, the company’s decline in net income margin is quite severe relative to decline in both sales and gross margins. The company’s recent earnings were a case in point. And since this competitor could increasingly turn out to be Whole Foods, Kroger does deserve the decline in its market cap. At the same time as long as Whole Foods nibbles at just the periphery, it is unlikely to post a massive increase in its own top line. Therefore, the opinion of weaker results at traditional grocery chains without, say, a double-digit growth in Whole Foods seems coherent. In terms of the impact this could mean more pain for Kroger, Wal-Mart, Sprouts, and Costco. Amazon should rise once these players start capitulating.

Note: Company related data have been sourced from Morningstar.

Note: If you find the article interesting, kindly hit the follow button to be updated about my latest insights.

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.


Is Sci-Fi a Religious Experience? Adam Savage Thinks So

Adam Savage is known as the long-time co-host of MythBusters, and he currently helps run the science and technology website Tested. His latest project is a science fiction interview show called Syfy25: Origin Stories, which he produced in partnership with Syfy.

“Science fiction has meant so much to me over the years that the minute it got mentioned to me I was like, ‘Yeah! I’m in,’” Savage says in Episode 276 of the Geek’s Guide to the Galaxy podcast.

Guests include showrunners like Ron Moore and David X. Cohen, authors like Neil Gaiman and Nnedi Okorafor, and media personalities like Chris Hardwick and Kevin Smith. The show celebrates the rich history of sci-fi across various media, and also explores the power of science fiction stories to make people think.

“It acts as a Trojan horse,” Savage says. “This was a constant refrain that my guests kept mentioning, that science fiction can bypass people’s normal partisan filters.”

Sci-fi has always faced hostility from people who don’t understand it, and its reputation has sometimes suffered from an association with low-budget films and TV shows. But Savage says the current state of the genre is very strong, and that first-rate productions like Blade Runner 2049 are sure to broaden its appeal even more.

“[This movie] is as lyrically allegorical and metaphorical as any piece of literature I have ever read,” he says. “It’s an amazing script, the performances are phenomenal, and the directing is as good as anything I’ve seen in film.”

He also notes that one of his guests, Kevin Smith, describes pop culture narratives like sci-fi movies and superhero comics as his “religion”—his source for meaning and moral guidance. So could science fiction evolve into something akin to an actual religion?

“I’m not positive that literature could satisfy that deep need for the transcendent, but I hope it can, because for me it really has,” Savage says. “I’ve gotten a tremendous amount from it over the years, not just entertainment, but also thinking about the ways I am a person, a father, a husband, a friend, a citizen.”

Listen to the complete interview with Adam Savage in Episode 276 of the Geek’s Guide to the Galaxy podcast (above). And check out some highlights from the discussion below.

Adam Savage on Blade Runner:

“I think that one of the ladders that human beings have been climbing for their entire existence is a ladder of understanding how precious consciousness really is. When we realize that there’s a full consciousness in front of us, our morality changes. … I think of the original Blade Runner as a terrific meditation on what it means to view the other, and to realize that the other might have a full consciousness, where we didn’t ascribe it. The wonderful [scene of] Harrison Ford saying, ‘She’s a replicant,’ and then immediately shifting to, ‘How can it not know what it is?’ He has to revert back to his innate racism about the replicants. And that allegory is still extant in the new film.”

Adam Savage on The Expanse:

“I will tell you one example of how great a family The Expanse is. I had traveled to Toronto to spend a week on the set of The Expanse, and I forgot—I can’t even remember what it was, it was like a razor or something like that. And I mentioned that I didn’t have it and didn’t have time to get it before I got back to my hotel that night, and one of the writers, Ty Franck, mentioned this to Steven Strait, the star of The Expanse, who turned out to live across the street from my hotel. And so half an hour after I got back to my hotel room, there was a knock on the door, and there was Steven with the thing that I needed. And I was like, ‘That’s a family, right? That’s beautiful.’ And that just made me feel all warm and fuzzy inside.”

Adam Savage on Star Trek:

“I’ve been seeing the response to the new Star Trek: Discovery, and I’m really excited about it. I got to spend some time with a few of the writers when I was at San Diego Comic-Con. But I think I will get to watch the new Star Trek in probably two days, that’s how busy I am right now. But look, the more Star Trek there is in the world, the better the world is. Because I think that Gene Roddenberry’s original vision still holds—a utopic vision of humanity in which our needs are met and we can use the extra mental space given by the fact that we’ve answered hunger and shelter and safety for all the citizens of the Earth to explore other cultures. [That’s] beautiful.”

Adam Savage on politics:

“My goal is to express myself politically in the politest way possible. I want to speak only in the way that I would if the person I am responding to was standing in front of me, and I compare everything that I say to that. I probably send one tweet for every 10 that I compose, because in my anger and my ire, I write lots of things that I don’t tweet, because I can see that I’m being—in my emotional response—divisive or exclusionary, and I don’t want to be. So I work really, really hard to be inclusive. I know that a lot of my fans from MythBusters don’t agree with me politically, I know that a lot of the Tested viewers that watch me online every week don’t necessarily agree with me politically, and that’s OK. I like to imagine though that if we were sitting at dinner we could agree on some basic precepts of how we take care of each other.”


Google Closer to Using Balloons for Telecom in Puerto Rico

Last Friday, engineers on Google parent Alphabet’s internet-by-balloon Project Loon tweeted that they hoped to bring emergency connectivity to Puerto Rico after Hurricanes Irma and Maria left more than 90 percent of the island without cellphone coverage.

Just seven days later, the Federal Communications Commission Friday gave the company a green light to fly 30 balloons over Puerto Rico and the US Virgin Islands for up to six months.

If all goes to plan, Alphabet’s balloons will soon help replace the thousands of cellphone towers knocked down by hurricane-strength winds. The balloons would provide voice and data service through local carriers to users’ phones.

The details of those arrangements aren’t complete. But in its application to the FCC, Alphabet included letters and emails from eight wireless carriers in Puerto Rico, in which they consented for Loon to use their frequencies for disaster relief and to restore limited communications. Two of those agreements were dated Friday.

Alphabet has previously deployed Loon to provide emergency phone service, in Peru following flooding there earlier this year. In Peru, Alphabet had already been working closely with a local wireless network, Telefonica, to coordinate spectrum use and prepare handsets to work with its balloons.

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In Puerto Rico, “things are a little more complicated because we’re starting from scratch,” an Alphabet spokesperson says. “Loon needs be integrated with a telco partner’s network—the balloons can’t do it alone.”

Project Loon was born in Alphabet’s moonshot X division, with the aim of serving the half of the world’s population that is still without internet access. It has launched several successful pilot projects, but has yet to be deployed commercially on a wide scale. It also is embroiled in a lawsuit with Space Data, a small company accusing Alphabet of patent infringement, misappropriation of trade secrets, and breach of contract following a failed acquisition bid.

With the FCC’s special temporary license in Puerto Rico, Alphabet plans to work along the same lines as in Peru. Thirty Loon balloons will float 20 kilometers (12.5 miles) above the earth in the stratosphere, relaying communications between Alphabet’s own ground stations connected to the surviving wireless networks, and users’ handsets.

Each balloon can serve 5,000 square kilometers (1,930 square miles), so the fleet is expected to provide service over all of Puerto Rico and potentially parts of the US Virgin Islands. Alphabet said it would consult with networks in the British Virgin Islands to minimize interference there.

Another issue is that Alphabet’s technology is still set up for Peru, so some handsets in Puerto Rico may need updates to use the balloon-connected service. Alphabet says it is working on temporary over-the-air software fixes for affected devices, which could include handsets from Apple, Samsung, and LG.

With approval in hand, Alphabet will turn to launching the balloons. Alphabet could not say when it will fly or when service would begin, but a spokesperson said, “We’re sorting through a lot of possible options now and are grateful for the support we’re getting on the ground.”

Restoring voice and data communications cannot come quickly enough for some of the affected. On Tuesday, Mother Jones reported Puerto Rico governor Ricardo Rosselló as saying, “Some people, even though we’ve documented the fact… that we’ve delivered food and water, it hasn’t gotten to some of them. Now, it could be for a whole host of reasons. One of them could be that they couldn’t hear it; the information didn’t get to them.”

CORRECTION, Oct. 7, 12:05 am: Project Loon is part of Alphabet, but is not part of Alphabet’s Google subsidiary. An earlier version of this article incorrectly called Loon a Google project.


China approves HP's $1.1 billion buy of Samsung's printer business with curbs

BEIJING (Reuters) – China said on Thursday it has approved HP Inc’s (HPQ.N) $ 1.1 billion purchase of Samsung Electronics’ (005930.KS) printer business with certain restrictions, citing concerns about the U.S. firm’s dominance of the domestic laser printer market.

HP announced the deal in September 2016, hoping to disrupt the $ 55 billion copier market by focusing on multifunction printers and more deeply embedding mobile and cloud printing technologies to its product solutions.

It hoped at the time to close the transaction within 12 months, pending regulatory review.

In a statement issued late on Thursday, the Ministry of Commerce said sale of A4 format laser printers by HP in China should be done on “fair and reasonable” terms and the firm must report every six months on their prices and related data to the ministry.

HP must not buy any stakes in other A4 printer manufacturers in China even if they are a minority equity investment, it said.

It must not adapt its printers to restrict compatibility with third-parties or claim in advertising that its printers are not compatible with other suppliers, the ministry said.

HP expects to close the acquisition in the fourth quarter which ends on Dec. 31, a spokeswoman said in an email. She declined to comment on the regulatory process.

Samsung was not immediately available for comment.

Under the deal, HP would add an intellectual property portfolio of more than 6,500 printing patents and nearly 1,300 researchers and engineers with expertise in laser printer technology, imaging electronics and printer supplies.

Reporting by Josephine Mason and Stella Qiu; Editing by Muralikumar Anantharaman

Our Standards:The Thomson Reuters Trust Principles.


The One Thing You Can Do to Create 100% Engagement in Your Company

Gallup does a monthly poll on the business buzzword “Engagement” – a measure of people actually working instead of going through the motions. Last month it was 32%, which means almost 70% of everybody in America is phoning it in.

This is easily the single most disturbing and least addressed statistic in business, largely because CEOs see research like Gallup’s, and rationalize away this stunning data with statements like, “Whadda ya gonna do? Everyone has the same problem. It’s just human nature.”

Except they don’t, and it isn’t.

I can point to many dozens of very large corporations and thousands of smaller ones that have much closer to 100% engagement year after year, decade after decade. Yes, the sample size is a small percentage, but it’s too many companies over too many decades to excuse them as anomalies; one-offs that either got lucky or have exceptional circumstances. The data shows every single company in the world could be there if they did one thing differently. And it’s a very simple thing; it’s just not easy.

For five years a client of mine who operates an extremely successful and large real estate staging company (we highlighted them a couple years ago in Inc.) had struggled to get their logistics crew of fifteen inventory pullers, packers and drivers to up their game. Everything they tried, including hiring people at much higher rates, produced dismal results.

It’s Not Them. It’s Us.

They were very discouraged with the logistics staff, but we broke the hard news with them – there was nothing wrong with their staff. The issue was the “Whadda ya gonna do?”, mindset that has been a problem for as long as people have worked for other people.

We had a tough conversation that didn’t focus on under-performing people, but on underestimating them. Every time we’ve seen a malaise of under-performance, with no exception, it is directly related to what we believe and expect of people; how motivated we believe they are or aren’t, how much we believe they will care or won’t’, how much WE BELIEVE they are ready and willing they are to take initiative and responsibility – or not. And that’s the problem. Until we believe the best of people, and require that they live up to their best, we’re likely to have 70% phoning it in.

Here’s just two measures of how under-performing staff were hurting the staging company.

1) Each job could easily be done by one truck in one trip – out and back; done. But 69% of those jobs required a second and sometimes even a third trip to get something they forgot. It was costing the company thousands of dollars a week in lost production and frustrated clients.

2) People would regularly call in the day before they didn’t come in, or worse yet, the day of, with flimsy excuses. That, too, cost untold money and disruption in scheduling.

There were a lot of other problems – people distracted in meetings, eating on company time, and even theft. The leadership was deeply concerned but felt they would just have to live with at least some of this – it was their expectation. And that again, was the problem.

People will raise themselves to our lowest expectation of them.

Changing The Expectation

From early in my childhood I was regularly told I was dumb, or, “The dumbest kid alive”, and queried with, “How dumb can you be?” Most of it was actually in jest, but I took it on board as the gospel. Turns out the answer was that I could be pretty dumb. I graduated at the bottom of my class and joined the army because I was pretty sure no one else would ever hire me. I started my first modest little company while in the army and began to see that maybe I had something to offer, changed the expectation, and off I went, starting ten businesses in seven industries on three continents.

David Marquet took over the worst rated submarine in the US Navy and in one year turned it into the best rated sub in the Navy. And here’s the kicker – he did it with the same 134 people who had made it the worst. He did it by changing the crew’s expectation from, “Do what you’re told” to, “No more followers – we’re all leaders now. You lead me in your area of expertise and I’ll lead you in mine.” Than he pushed decision-making to the levels at which they would have to be carried out.

He couldn’t have done that without having a very different expectation of what those 134 people were capable of than his predecessor. It was his mindset about them that changed everything about the way they performed. He believed they could be great, and they all raised themselves to his highest expectation of them.

Stunning Results

Back to our staging company friends. They’re still working through this – a long way to go, but here’s three encouraging and radical data shifts since they decided to raise the bar a few months ago:

1) Unnecessary trips to completion have gone from 69% to 8-10% monthly, saving thousands of dollars weekly.

2) Not a single person has called in and excused themselves from work with flimsy excuses since the leadership changed their mindset about what to expect – not one.

3) They’ve reduced their warehouse and logistics staff from fifteen to eight, and those eight highly “engaged” people get more done than the fifteen used to.

By the way, they also created meaningful incentives and peer reviews, and turned all their staff into capitalists, which helped make the game interesting. They didn’t just “expect more”.

You get what you expect, not what you hope for.

What you expect is everything. On a scale of one to ten, most companies function from three to eight – “Whadda ya gonna do? It’s just human nature.” But without fail, companies that make the simple, dramatic shift to function from eight to ten, create environments where people accept the challenge and step up.

Play an adult’s game, and adults come to play. Jack Dorsey (CEO Twitter and Square) says that one of his main responsibilities is to constantly raise the bar. Raise your bar, make sure there is something in it for them, and watch what happens.

What do you expect? That people are highly motivated and want to do well? Or – people will only do so much as to not get fired? Whichever one you believe, it’s a self-fulfilling prophecy. Changing out your staff isn’t the solution. Your belief in people, or lack of it, and the expectations that follow are the problem, or the solution. You get to choose.

As Yoda said, “Choose wisely.”


Ford CEO Jim Hackett’s 6-Point Plan to Turn Around the Automaker

Ford CEO Jim Hackett’s Blueprint: Cut Costs, Add Electric | Fortune


Former Equifax chief will face questions from U.S. Congress over hack

WASHINGTON (Reuters) – U.S. lawmakers are due to question the former head of Equifax Inc (EFX.N) at a Tuesday hearing that could shed light on how hackers accessed the personal data of more than 140 million consumers.

Richard Smith retired last week but the 57-year-old executive will answer for the breach that the credit bureau acknowledged in early September.

Late Monday, Equifax said an independent review had boosted the number of potentially affected U.S. consumers by 2.5 million to 145.5 million.

In March, the U.S. Homeland Security Department alerted Equifax to an online gap in security but the company did nothing, said Smith.

“The vulnerability remained in an Equifax web application much longer than it should have,” Smith said in remarks prepared for delivery on Tuesday. “I am here today to apologize to the American people myself.”

Smith will face the House Energy and Commerce Committee on Tuesday but there will be three more such hearings this week.

Equifax keeps a trove of consumer data for banks and other creditors who want to know whether a customer is likely to default.

The cyber-hack has been a calamity for Equifax which has lost roughly a quarter of its stock market value and seen several top executives step down alongside Smith.

Smith’s replacement, Paulino do Rego Barros Jr., has also apologized for the hack and said the company will help customers freeze their credit records and monitor any misuse.

There has been a public outcry about the breech but no more than 3.0 percent of consumers have frozen their credit reports, according to research firm Gartner, Inc.

Smith said hackers tapped sensitive information between mid-May and late-July.

Security personnel noticed suspicious activity on July 29 and disabled web application a day later, ending the hacking, Smith said. He said he was alerted the following day, but was not aware of the scope of the stolen data.

On Aug. 2, the company alerted the FBI and retained a law firm and consulting firm to provide advice. Smith notified the board’s lead director on Aug. 22.

Patrick Rucker contributed from Washington; editing by Clive McKeef.

Our Standards:The Thomson Reuters Trust Principles.


SoFi's CEO hiatus stalls its big-time banking ambitions

SAN FRANCISCO/NEW YORK (Reuters) – Under the leadership of Chief Executive Mike Cagney, Social Finance Inc (SoFi) set its sights on becoming a one-stop shop for every well-to-do millennial looking for financial services and a romantic partner.

     One of the most valuable private financial technology startups in the United States, SoFi’s $ 4.3 billion valuation was based on expectations it could develop into a major lender but Cagney’s departure this month and the circumstances around his exit complicate efforts to create a new-generation bank that could compete against JPMorgan or Bank of America.

“This will be a headwind for them for some time,” said Robert Wildhack, an analyst for financial technology and marketplace lending firms at Autonomous Research.

“It is hard to see how management turnover wouldn’t delay the growth and penetration of products.”

Cagney stepped after a lawsuit alleged he presided over a hostile work environment for women that enabled senior executives to harass female employees.

Cagney did not respond to a Reuters request for comment. In a blog post to SoFi employees before he resigned, Cagney said the allegations were “being thoroughly investigated by outside attorneys we have engaged.”

The company has hired headhunters over the past few days to help find his replacement, but an appointment is not expected to take place until the end of the year, a source familiar with the matter told Reuters.

The gap at the top is likely to stall SoFi’s application for a banking license, according to the source, because regulators assess whether a company has a capable CEO before allowing it to accept deposits.

In addition to Cagney, SoFi has to replace other senior executives that have left over the past few months, including former chief financial officer Nino Fanlo, ex-chief revenue officer Michael Tannenbaum and former chief technology officer June Ou. The CEO search is the company’s first priority, according to a spokesman.

    A banking license was a key part of Cagney’s push to grow SoFi beyond its core business of student loans and unsecured personal loans.

“Longer term deposits are a key financial product obviously, so their ability or inability to offer that is an opportunity for borrowers to jump to a competitor,” said Wildhack.

Rare for a startup, SoFi is profitable. It earned $ 61.6 million in the second quarter of 2017, after adjustments, for depreciation and amortization, taxes, stock-based compensation and other miscellaneous charge offs and investments.


    Cagney, a former bank trader, had been the driving force behind SoFi’s big-time ambitions, pushing it into mortgages, personal loans up to $ 100,000, wealth management services and life insurance. He told investors after the second quarter that the company was undertaking aggressive growth.

    But without Cagney at the helm, the emphasis is expected to shift.

    The company will be more disciplined about testing new products before selling them widely, a source close to the company said.

In 2016, SoFi announced that it would no longer factor FICO credit scores into its underwriting process. The company scrapped the initiative after default rates started ticking up for loans that had been FICO-free, according to a source familiar with the matter.

SoFi went back to using FICO among other data points when assessing borrowers’ credit worthiness, according to a spokesman.

SoFi’s core business is still the $ 1.4 trillion U.S. student loan market and there are plans to set up in Australia and Canada, where students graduate with average debts of $ 22,000 and $ 20,000 respectively. Those plans have been put on hold as the company awaits the appointment of a new CEO, according to the first source.

The spokesman said the company had no changes to announce on international launches.

“People fundamentally want this product,” said Manu Gupta, general partner at Lakestar, a venture capital firm that has invested in SoFi. “While we had a lot of confidence in Mike Cagney, we still have high expectations in the company because everything is not about one leader.”


    SoFi started in 2011 offering student loan refinancing to graduates of top-tier schools such as Stanford University. It could offer a better interest rate than federal government loans, on the basis that Ivy League graduates will have higher-earning jobs and are less likely to default.

    But competitors quickly appeared. So SoFi added new products. It also ensured its marketing tactics differentiated it from rivals. Customers referred to as “members” are invited to SoFi-hosted events from cooking classes and yoga sessions to cocktail parties and single meetups.

     “We don’t think of ourselves as a finance company, we think of ourselves as money, career and relationships,” Cagney said at a technology conference in May.

In line with this philosophy, he had championed the creation of a dating app but that idea has now been scrapped.

    SoFi was successful in getting its members to sign up for other products. In the second-quarter letter to investors, Cagney said 40 percent of SoFi’s mortgages and 56 percent of its wealth accounts came from existing members.

    The problem is that SoFi’s core clients — so-called Henrys: high earners not rich yet – do not have the means yet to be lucrative wealth management clients.

    SoFi Wealth had amassed only $ 12.25 million in assets under management at the start of September, according to a company filing.

    Investors say Cagney’s successor will need to communicate a steadier growth strategy.

    “I think the company needs to slow down, focus on winning products, dump others; build a resilient non-frat house culture; and take a longer term view,” said Ryan Gilbert, a partner at venture capital firm Propel Venture Partners, which has backed at least a half dozen fintech companies but not SoFi.

Additional reporting by Gregory Roumeliotis; Editing by Carmel Crimmins and Susan Thomas

Our Standards:The Thomson Reuters Trust Principles.


Equity Residential: Too Bond-Like Right Now

Our apartment REIT exposure has been through REITs focused primarily on student housing. Despite the overall portfolio’s outperformance relative to the MSCI US REIT Index (RMZ), our positions in American Campus Communities (ACC) and Education Realty Trust (EDR) have lagged the broader Apartment REITs. We did, however, underweight Apartment REITs so that the underperformance within the sector had a muted effect on the overall performance of the portfolio. We still like the student housing REITs, which had near misses on their 2017-2018 pre-leasing guidance numbers. Both ACC and EDR are down about 5% for the week.

That said, it may be time to reconsider some of the more traditional Apartment REITs, which we downgraded earlier this year after torrid outperformance over the previous few years. Let’s take a look at one of the largest REITs in the sector, Equity Residential (EQR).

Equity Residential

Equity Residential is an S&P 500 company. It is focused on the acquisition, development and management of apartment and multifamily residential properties in top U.S. cities/markets such as Boston, New York, Washington DC, Seattle, San Francisco and Southern California. We don’t take offense that they focus on coastal cities but have essentially ignored my hometown of Miami.

Equity Residential has about $ 21 billion in total assets and had about $ 2.4 billion in revenue over the last 12 months. It owns about 77,000 apartment units across 300 properties in the United States so at least when we want to evaluate the coastal cities, we can get a good idea of the market by analyzing EQR.

East Coast AND West Coast

The key points of Equity Residential’s business strategy are, as we mentioned, focus on the coastal markets where incomes tend to generally be higher than the national average and where renters want to work and live. The markets they operate in are those with the lowest vacancy rates over the last 15 years and with average rent growth of over 2.5% annualized over the last 20 years.

Its primary markets are Boston, New York, Washington DC, Seattle, San Francisco and Southern California, which includes San Diego and Los Angeles. Each of these markets has strong demand, constrained supply characteristics, and high occupancy rates, as we mentioned. None of those trends have changed – these are still some of the strongest rental markets in the US.

Besides being in some of these highest demand markets, EQR properties also have attractive characteristics. For example, compared to peers, EQR properties have higher Walkscores and a greater percentage of renter households within a 1-mile radius of its properties.

Furthermore, EQR has lower overhead expenses as a percent of total revenue than the apartment peer average.

Q2 2017 Results and Q3 Outlook

Equity Residential had strong and steady demand for rental housing in its gateway, coastal markets – leading to high occupancy, retention and renewal pricing despite elevated levels of new supply. The key points of Q2 2017 results were:

Earnings Per Share (EPS) for the second quarter of 2017 was $ 0.53 compared to $ 0.59 in the second quarter of 2016. Funds from operations (FFO) was $ 0.77 per share for the second quarter of 2017 compared to $ 0.90 per share in the second quarter of 2016. Normalized FFO for the second quarter of 2017 was $ 0.77 per share compared to $ 0.76 per share in the second quarter of 2016. EPS for the six months ended June 30, 2017 was $ 0.92 compared to $ 10.36 in the six months ended June 30, 2016. The difference is due primarily to $ 9.58 per share in higher property sale gains as a result of the company’s significant property sales activity in 2016 FFO was $ 1.53 per share for the six months ended June 30, 2017 compared to $ 1.37 per share for the six months ended June 30, 2016. Normalized FFO for the six months ended June 30, 2017 was $ 1.51 per share compared to $ 1.52 per share for the six months ended June 30, 2016 Q2 revenue growth of 2.1%, on a same store comparison, was driven by better-than-expected renewal rate growth and a 250 basis point increase in the percentage of residents who chose to renew with Equity Residential.

The decline in FFO was essentially attributable to the company’s disposition activities but shareholders still received a special dividend of $ 11 per share obtained from the proceeds of those sales. That data is not picked up in your traditional dividend yield calculation but it is part of the total return calculation. Over the last 1 year and 3 year period, EQR has returned 3.7% and 11% annualized, respectively. Sounds reasonable but it was towards the bottom of its Apartment REIT peers, in line with Avalon Bay (AVB), the other behemoth in the sector.

Now looking forward to Q3, the forecast was for FFO per share between $ 0.77 and $ 0.81 per share.

We hope that it comes out at the top end of that range, which would, at current prices, make the stock more attractive. Current FFO forecasts call for a slight increase after FFO dropped slightly in 2016. As the chart indicates, however, by 2019, FFO is still not at levels reached in 2015.

We like the company and the markets it operates in but it might be priced to perfection – or close to it. Analyst consensus estimates call for just a 3% price return (that’s the dividend) and even though I don’t give much credence to analyst estimates, I mention it to readers as another point of information.

The chart below maps out the P/CFO vs. potential return based on analyst estimates. As we mention at the beginning of the article, we own EDR and ACC, which are positioned at the top right of the chart – high return potential and trading at a premium to peers. On a growth-value continuum, they would be considered growth stocks. Equity Residential, on the bottom left, looks both pricey and boring.


The major risks associated with Equity Residential are:

  • Low occupancy or fall in the occupancy rate below 95% in the equity residential markets. High occupancy rates are a staple of the company and any shortfall could result in a strong pullback in the stock.
  • Resident retention in a challenging market due to new supply in lease-up. The company’s focus on resident retention mitigates this risk but its still there.
  • Concentration in six cities/areas in the US is a high-risk affair.
  • High rent locations, which are more affected by downturns in business.
  • If new supply increases in Equity Residential markets which have been enjoying less new supply in high density markets on an average i.e. 1.5% annually during 2001-2016;
  • Equity Residential enjoyed better returns in Q2 2017; as the percent of people in America, who choose to rent versus own, peaked now at a 50-year high. This may not continue.
  • Unfavorable changes in the global, national, and local economic and political factors affecting renting activities.
  • Reduction in demand for multifamily properties.
  • Increased competition from other multifamily properties and single-family homes (both as rentals and owned housing).
  • Costs of materials required for maintenance, repair, or development may be more expensive than anticipated, particularly in light of scarce labor and materials being reported by builders AND the recent damage caused by Hurricanes Harvey and Irma, which could drive up expenses.

The Bottom Line

Investors looking for a safe bet in the Apartment REIT sector may benefit, both financially (albeit, less so) and psychologically, from investing in EQR relative to some of the other less stable companies. It only pays a 3.1% dividend which is decent but not great, and there isn’t much growth expected in FFO over the next few years. EQR has been extremely successful in navigating the real estate cycle and we have no doubt it will do so again, but for now this stock is the equivalent of a coupon clipping bond – for some investors, that might be OK.

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Disclaimer: Please note, this article is meant to identify an idea for further research and analysis and should not be taken as a recommendation to invest. It is intended only to provide information to interested parties. Readers should carefully consider their own investment objectives, risk tolerance, time horizon, tax situation, liquidity needs, and concentration levels, or contact their advisor to determine if any ideas presented here are appropriate for their unique circumstances.

  • Past performance is not an indicator of future performance.
  • This post is illustrative and educational and is not a specific offer of products or services.
  • Information on this blog is not an offer to buy or sell, or a solicitation of any offer to buy or sell the securities mentioned herein.
  • Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed.
  • All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change.
  • Any positive comments made by others should not be construed as an endorsement of my abilities to act as an investment advisor.

Disclosure: I am/we are long EDR.

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 Senate Is About to Approve Commercial Sale of Self-Driving Cars (But Not Trucks)

You will soon be able to ride home from your local car dealership in a car that finds its way there unassisted while you nap or read. That reality came a whole lot closer this week, with bipartisan agreement in the Senate on legislation allowing self-driving cars to take the the roads. The law is expected to come up for vote in the near future, and pass.

The House passed similar legislation, also with bipartisan support, several weeks ago. That legislation allows car manufacturers to sell up to 25,000 autonomous vehicles the first year they offer them. That will go up to 100,000 cars a year if the self-driving cars prove as safe as human-driven ones. And that’s not all. The Trump administration also helped out recently by issuing voluntary safety guidelines for autonomous cars and at the same time requesting that states avoid writing laws or regulations governing self-driving cars and possibly hampering their introduction.

The senators who arrived at the self-driving deal note that autonomous cars appear to be safer than human-driven ones. “Ultimately, we expect adoption of self-driving vehicle technologies will save lives, improve mobility for people with disabilities, and create new jobs,” said Senators John Thune (R-S.D.) and Gary Peters (D-Mich.) in a joint statement. They may be right: When a Tesla owner died while his car was in Autopilot mode last summer, company founder Elon Musk pointed out that it was the first known Autopilot fatality in 130 million miles of driving, whereas there’s a human fatality for every 89 million miles of traditional driving.

But if cars with no one at the wheel will soon become a common sight, the same won’t be true of semi trucks. The Teamsters successfully lobbied for the House version of the bill to limit self-driving vehicles to 10,000 pounds or less. That could be a problem for the U.S. trucking industry, which was short an estimated 48,000 drivers at the end of 2015, a shortage that’s expected to grow to 175,000 over the next seven years. That will create enormous pressure to replace hard-to-find long-haul truck drivers with no-muss, no-fuss AI.


Uniti Group: I Just Bought Shares Of This 16% Yielder

I take a lot of pride in the fact that my portfolio has never experienced a dividend cut. I came close once with KMI, but I managed to sell the position before the cut was announced. I spend a lot of my time during the due diligence process focusing on dividend-related metrics with a specific focus on sustainability and dividend growth prospects. Well, I just put that perfect record at risk with a purchase of Uniti Group (UNIT) shares at $ 15.01, or a very hefty 15.98% yield.

This ~16% yield is nearly double my previously high yield, which was Omega Healthcare Inc (OHI) at just a tad bit more than 8%. Typically, when I see yields in the double digits, I get nervous. Yields that high mean the asset is distressed. When looking at stocks like UNIT investors are receiving a very high potential reward for exposing themselves to a very high perceived risk. I’m not a huge fan of making these risky bets. But, I’ve spent a lot of time reading articles and commentary about UNIT published over the last couple of weeks focused on the company’s enormous ~40% fall since the start of August. I’ve read enough bullish commentary to get me interested in the stock, especially from contributors here at Seeking Alpha that I’ve come to respect over the years.

Honestly, I think this company’s recent drama has been exhausted by the Seeking Alpha community and I don’t have anything new to add to the conversation other than the fact that I am now long the stock. I like to keep followers up to date on my recent portfolio maneuvers though, so I wanted to write this piece. However, instead of re-hash the pros and cons of UNIT ownership here, I will link you to some of my favorite articles recently published regarding UNIT.

My absolute favorite REIT contributor here at Seeking Alpha is Brad Thomas. Mr. Thomas has led me to highly profitable investment decisions on several occasions. I respect his opinion in the REIT space above all others. In late August/early September, he published two bullish pieces on UNIT (when shares were trading at levels much higher than they are today). One of them remains behind SA’s Marketplace paywall, but another is free to the public. Here’s a link to Mr. Thomas’s most recent UNIT piece which includes an informative interview with UNIT’s CEO Kenny Gunderson and a reiteration of Mr. Thomas’ “BUY” rating on shares post Q2 results.

Another UNIT piece that really caught my eye was Dividend Sensei’s recent article explaining why he’s adding to his UNIT stake, making it his largest individual position. I really like Dividend Sensei’s work here at SA. He puts together a very in-depth analysis that is also easy to understand. I admit that I am much more risk-averse than he seems to be. He trades with margin and oftentimes seeks much higher yields than I do. I would never allow a company like UNIT to become my largest holding. Actually, I don’t imagine a future where UNIT ever makes up more than 1% of my overall portfolio (right now, it’s weighting is ~0.375%). Even so, I oftentimes find is opinions to be more than reasonable and while our portfolio management strategies aren’t the same (which is to be expected because no two people are in the same situation when it comes to personal finance and long-term financial goals), I still respect his opinion immensely.

I’ll talk more about this piece in a bit, but Ian Bezek’s recent article on the matter was valuable to me as well, especially in terms of trying to put this company’s potential risks into perspective against what seems to be an overly bullish consensus amongst SA contributors and readers, mainly, I think, because of UNIT’s incredibly high yield. Ian is long UNIT, although as of his latest piece, he hadn’t added to his position on more recent weakness. I think Ian has a keen eye for value and the fact that he too was long, played a role in my decision-making.

Alpha Gen Capital wrote a particularly bullish piece, hinting at the fact that UNIT could be one of the year’s best opportunities due to recent overreactions in the share price movement. This piece really breaks down the issues that UNIT is facing with WIN, some of the potential fallouts of legal/bankruptcy scenarios. All of this is very confusing and remains highly speculative, though my main takeaway is that it appears likely that, regardless of a WIN bankruptcy, UNIT will still be in a position of strength due to the Master Lease arrangement it has with WIN. Lease re-negotiation still appears to be a possible scenario here, which would change the landscape that UNIT operates in the present, but for the time being, I’m willing to trust in the payments from the Master Lease deal and rely on the strength of UNIT’s infrastructure, which should remain in demand moving forward.

And most recently, Beyond Saving and Dane Bowler have written pieces regarding the breaking news that broke this week surrounding more legal/head fund issues regarding WIN bonds defaulting. The comment streams following all of these pieces have been enlightening. There are bulls and bears on either side of the aisle, but I was pleasantly surprised to see that another one of my favorite SA REIT contributors, Bill Stoller, recently went long UNIT as well. As far as I know, Mr. Stroller hasn’t published an article focused on UNIT, but I’ve seen him make enough solid calls in the past to give weight to his recent purchase in my own decision-making process.

So, there you have it. This is a unique situation for me, investing in a speculative income play like this. I may not like to take big risks like this, but I have always said that I like to buy things when they’re cheap. At this point, I admit that UNIT could just as easily turn out to be a value trap as it could a tremendous value. Looking at the value of the company’s assets and its cash flow potential, I see validity in calls that have price targets in the $ 35-40 range. That would imply massive upside at today’s prices. Due to issues that UNIT faces with its over-reliance on distressed Windstream (WIN), I don’t foresee UNIT selling anywhere near the fair value of its parts anytime soon though, so their estimates really amount to a hill of beans.

There are so many rumors and potentially headwinds swirling around this stock that I think it’s nearly impossible to predict its future share price movements. I wouldn’t be surprised to see a short squeeze that sends the stock rocketing up to $ 20 or more tomorrow. I also wouldn’t be surprised to continued pressure on shares, sending them down into the single digits. I won’t attempt to signal any sort of direction of these shares; simply put, I acknowledge that I am speculating here.

This is why I bought a relatively small, ¼ position. I bought these shares because of the combined upside potential of the shares in a turnaround as well as the very high ~16% dividend yield. Right now, it appears that UNIT’s dividend is covered by AFFO, which management expects to come in somewhere in the $ 2.50 range in 2017. This is a good thing. However, as discussed at length in this article by Ian Bezek, a dividend cut may still be in the cards because without one, it will be very difficult for UNIT to raise cash.

UNIT needs to raise cash over time to continue to diversify itself away from WIN. Right now, WIN makes up ~70% of the company’s business. Management has stated plans to get this ratio down to ~50% in the short-term; however, this transformation will require additional acquisitions and I think it’s ludicrous to think that UNIT management will be able to find investments with cap rates that exceed its current dividend yield.

Because of this scenario, one could argue that a dividend cut for UNIT would actually be a good thing for the long-term. It might enable it to continue to diversify away from WIN exposure and grow its asset base. Michael Boyd wrote an article focused on this possibility today. This general point was that a distribution cut for UNIT is the right move for management to make. Once again, in the comment section, there are members on both sides of the fence of this issue. There are many question marks when it comes to UNIT in the present, but the one thing that is clear is that the company’s 16% has surely caught the eye on SA’s dividend and income community.

My portfolio’s rule regarding dividend cuts is cut and dry. A cut equals a sell, without exception. Well, being that an investment in UNIT breaks just about half of my stock screening rules anyway, I will be in wait and see mode if UNIT should slash its dividend. This is a small enough position for me that in the event of sudden weakness, it won’t do significant damage to my portfolio’s overall returns. On the flip side of this coin, UNIT’s yield is high enough to move the needle a bit in terms of my annual income expectations. Due to its extremely high yield, this ¼ position in UNIT is currently scheduled to generate the same amount of income as a typical full position with a “normal” yield for my portfolio would over a year in just a couple of quarters (my portfolio’s overall yield is just a tad above 2%).

Investing in distressed assets has led to riches for investors throughout the history. It has also lead to ruins. I’m not saying that I’m smart enough to pick and choose the winners, but I have seen enough bullish opinions from well-respected analysts/contributors to inspire me to make a small bet on UNIT. I don’t think these shares are for the faint of heart. There are so many rumors flying around regarding WIN that attempting to trade in and out of UNIT on a daily basis seems to be a fool’s errand as well. I plan on stashing the small position of UNIT shares that I bought at $ 15 away and accepting the income that they generate for my portfolio, whatever that may be. I bought one day before UNIT went ex-dividend, meaning that I’ve already captured one $ 0.60 payment. I don’t know how many more investors can expect at this level, but if management is able to maintain the dividend, I expect to do quite well here.

Although I realize that I may end up having to stay in this name for awhile depending on what happens moving forward, I don’t think this is a buy and forget type of stock. It’s both a speculative income play as well as a turnaround play. If it turns around, I think it will turn around quickly. I will continue to monitor the business and management’s attempt at diversifying its customer base. If management cuts the dividend I’m sure the share price will suffer and at that point I’ll be in it for the long-haul, hoping for a Kinder Morgan-like recovery post dividend cut. If the market receives better than expected news out of WIN and UNIT bounces drastically, I will be happy to sell my shares, taking my profits large short-term profits (these shares are held in a tax-advantaged account so that I don’t pay taxes on that hefty dividend).

Disclosure: I am/we are long UNIT, OHI.

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.