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Lions big investment in Trey Flowers starting to yield returns – MLive.com

Posted: October 8, 2019 at 6:48 am


ALLEN PARK -- Sacks are to defensive ends what interceptions are to defensive backs. Theyre certainly important, and you expect them when you pay elite money. But they only begin to tell the story of how a player has performed.

Take Trey Flowers, for example.

He was lured to Detroit by the idea of re-uniting with Matt Patricia, sure, but that $90 million contract helped too. It was more money than anyone else paid for any free agent this year. And for that kind of price, you expect to see some sacks.

But by that measure, Flowers -- with one sack in four games -- has been quiet through his first quarter-season in Detroit. And even that came on a desperation final play of the first half against Philadelphia, where Carson Wentz decided to tuck the ball and go down rather than force the issue downfield. Flowers touched Wentz with his left hand, so he got credit for the sack. And thats it.

He has been productive in other ways, though.

After pressuring opposing quarterbacks just five times in the first two games of the season, Flowers has racked up 10 pressures in Detroits last two games alone, making life a little more uncomfortable for Wentz and Kansas Citys Patrick Mahomes, the latter of whom had his worst game in his last 16 appearances against Detroit.

Flowers also forced one fumble against the Chiefs, and is now ranked inside the top 20 edge rushers in the game according to ProFootballFocus.

Hes a hard-charging -- really, a hard-charging, hard-playing (guy), defensive coordinator Paul Pasqualoni said. The effort level -- his effort level is up there. I think he kind of silently goes abut his business. Hes had some really good production, really contributed. Maybe not always the fanciest deal, but really a good player.

Flowers four-game debut is not entirely dissimilar from his time in New England, where he never put up big-time sack numbers -- he ranged from 6.5-7.5 sacks his last three years there -- but was highly disruptive. Last year, for example, he finished with 7.5 sacks. That ranked 34th in the league. But he also racked up more pressures than everyone except Dee Ford, and did it while lining up across the defensive front.

That was part of the draw for Detroit, which has installed the New England defense under Matt Patricia and now favors the same kind of versatility in its defensive linemen. Through four games, theyve used Flowers at seven different positions according to ProFootballFocus, mostly at right end, but also at left end, on the nose and, for one snap, slot cornerback.

He started slowly the first couple weeks, perhaps not a surprise given all the time he missed in the offseason. He missed OTAs and minicamp while recovering from shoulder surgery, then opened training camp on the physically unable to perform list. He didnt start practicing until Aug 10, and was extremely limited for a while after that.

So he needed some time to get comfortable. But the production has ticked up the last couple weeks, helping lead the way for that highly anticipated defensive front, and there is optimism around Allen Park that his best football isnt far away.

Working on it, Flowers said, when asked recently how he felt hes played.

And if hes able to get there, that defensive front -- so highly anticipated coming into the season, but dogged by injury and production issues in the first quarter of the season -- might finally realize its potential.

Just get 'em all healthy, you know? Pasqualoni said. Get Mike Daniels back, get DaShawn (Hand) in there, just get 'em all together, hopefully as we start this next quarter of the season. Theyll (hopefully) all be available, start developing those guys together.

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Lions big investment in Trey Flowers starting to yield returns - MLive.com

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October 8th, 2019 at 6:48 am

Posted in Investment

How do Charlotte millionaires spend and invest their money? And what’s their best purchase under $100? – Charlotte Agenda

Posted: at 6:48 am


In our story At what age do people become millionaires in Charlotte? we shared that on average, Charlotte millionaires hit $1 million in net worth at 41.5 years old, and the average net worth of those people today is $4.64 million. We also explored how people invest and spend that money.

Most survey participants accumulated their wealth by starting their own company or working a high-paying job, investing in real estate, taking advantage of stock options, 401(k) plans and living below their means.

Real estate was the respondents No. 1 investment, although nearly all said they invest in multiple ways to create a diverse portfolio.

We have numerous plans. IRAs, SEP, two active 401ks, 529s for each of our three kids, and we just opened a stock plan, one respondent said. We max out everything we can on our 401ks and have monthly deposits into the others. Weve tried to maintain our standard of life even when our income has jumped. We are also putting money into our house. We bought low in a good neighborhood and have been adding on (paying in cash). We have a low mortgage and a high home value because of it.

Some people went more in-depth with their responses. A handful explained they started by investing in stocks, and as soon as they accumulated enough money they moved into real estate.

Now, I have friends who run hedge funds and private equity shops who have given me smaller allocations than they would normally take, one said.

This is important, they said, because you dont have to have it all at once or make a giant investment to see a return; you can start slow and gradually build a more diverse portfolio (even if you dont have friends who run hedge funds).

I dont track them. My assistant does, one said. Another said, I have always tracked my money, starting with Quicken in the 90s, and now using Mint on-line as well as the personal finance hub through Fidelity.

Quicken and Mint were mentioned most often among programs used to track spending, but plenty of people said they just use an Excel spreadsheet they made.

A few said they put all expenses on their credit cards and pay them off monthly, so they are aware of their spending and will look further into it if they feel theyre over-spending or need to make adjustments.

Yes, all purchases are made on cash-back credit cards. I then export those transactions into Excel, which I then plug into a budgeting spreadsheet I made a long time ago. The spreadsheet automatically recognizes the transactions and puts them in the correct budget categories and months.

Of those who said they dont track now:Not on an everyday basis, but taking the big-picture approach. I did track expenses in more detail when I was younger and trying to be more disciplined.

There was also plenty of advice like this:

No one said they got to where they are by skipping lattes, but sacrifice was a theme of the responses.

I obviously think its dumb to fund a luxury lifestyle with debt, but theres nothing wrong with a luxury lifestyle itself. I drive a Tesla but I paid cash for it after eliminating debt and fully funding all tax advantaged accounts.

Several people mentioned driving average cars they were able to pay for with cash or pay down quickly.

Be smart in buying cars. We never had car debt and hold our cars for ten years or more. And, buying two- or three-year-old cars is a great way to get quality and technology without paying too much, one person said.

And a couple of people said they still find a lot of value in sales and penny pinching.

My parents came from nothing, one wrote. We learned to save, use coupons we literally cut from the newspapers, wait for sales, share meals, and never overspend. Though I am more financially comfortable I find myself doing the same to this day. I will wait until that shirt goes on sale, I dont find it necessary to stay at the five-star resorts when I travel, I still sit in the nose bleeds at sporting events, and I always give back what I can. Maybe that will change in the future but money doesnt define a person.

We also asked our respondents a few lighter but still revealing questions, including their favorite restaurant.

Three of Bruce Moffetts restaurantsreceived the most mentions: Barringtons, Good Food on Montford, and Stagioni.

The other most popular picks were Beef n Bottle , Bardoand Peppervine.

Chick-fil-A also received an honorable mention from one respondent illustrating the range of tastes within the upper echelon.

The number next to each response is their net worth.

Best purchase under $100:

Spotify. Great music and podcasts help me to burn stress and relax. $20 million

A good cup of coffee. $8.5 million

Most recently my Roku so that I could cut the cord on cable and save $175 a month! $5.2 million

A rescue dog. $2 million

Gym membership. Stay healthy. Socialize with friends. $5 million

The cushions to fit over the crevices in my car to keep crumbs from falling in hard to reach places. Its a Shark Tank invention. $2.4 million

Power wine aerator. Makes enjoying wine more enjoyable after a stressful day. Great conversation piece too. $2 million

Notebooks. As much as I want to use digital lists, theres something for me about a paper notebook. I create lists for work, home and the kids and it definitely helps me keep my sanity. That and paper calendars! $1 million (many people said notebooks)

Good sunglasses, they are just fun. $4 million

Omg. My Swiffer. I mean its awesome. $16.99. Lasts 10 years and makes life easier. $3 million

Fresh fruit and vegetables each week. Money is worth less if you are not healthy. $3.5 million

Griottine cocktail cherries: $20 for a big jar! They enhance any Manhattan. $1.7 million

Lululemon sweat pants they make me feel relaxed and appreciative. $2.5 million

Shares of Microsoft stock due to their increased value over time. $4.5 million

My Fitbit. It motivates me in ways I never would have expected. $1.5 million

The book Rich Dad, Poor Dad. It totally changed my perspective on money. $2.5 million

Sitters for Wednesday night date-night when the kids were little. $1.3 million

Yoga mat yoga is my therapy & one of my greatest joys. $3 million

Amazon @ $30/share in 2000. $2 million

A stay at the Disney World Camp Grounds in the 80s you received all the same access as the fancy resorts and it was a great campground. $2.5 million

Golf. Leisure. $2.2 million

That 3-pack of Juicy Jay crowlers was pretty good. $1.5 million

Locally roasted coffee, saves money compared to Starbucks and the coffee tastes better. $2.8 million

Trayana Earbuds. Same performance as airpods, under $50. $1.3 million

Monthly gym membership mind and body need to be right for success. $1.5 million

My first set of golf clubs. Ive made a lot of friends on the golf course. $1.1 million

Kate Spade bag at her outlet store in Palm Springs. I use that bag almost everyday for the last 1.5 years. Talk about return on investment! $1.6 million

I buy a lot of my work clothes at Goodwill for $1-$5. Trust: I look good and no one knows. Brand names with perfect fit for a dollar, not kidding. I dont waste hours looking, though. Ill glance in a GW every now and again and if theres a bunch of stuff in my style and size Ill stay and try things. People donate in batches and when it rains it pours. I usually get about a dozen perfect items at once or nothing. And I cant even tell in my own closet what was full price (I do shop full price when convenience matters) and what was $1. $2 million

My marriage license. My spouse and I generally work to prevent us from acting on our worst impulses. $1.7 million

Milk frothier from Williams Sonoma. Makes early mornings less painful. $1.2 million

WSJ subscription: pays dividends everyday. $5.2 million

Electric toothbrush so I can have that million dollar smile. $2.83 million

Date night (although its hard to stay under $100 these days). Its important to invest in your marriage. $1.5 million

Picnic basket. Encourages quality time with my wife. $1 million

TSA Precheck, I cannot begin to put a value on the peace of mind being able to bypass most airport security lines. $1.1 million

A $3 box of Now & Later candy that I took to school separated to sell individually and came home with $9. My first business was born. $1.4 million

Monthly deposits for children into their own mutual funds. $1.7 million

Salads every night for dinner it keeps me healthy and I dont have to cook. $2 million

Gave $100 to someone who needed it. $1.6 million

Best purchases over $1,000:

My first hotel. $125 million

House because it appreciates. $20 million

My condo. I love the view. $20 million

Espresso machine. Other than my cars, the only item I use daily. $25 million

Our mountain retreat. Its our getaway where stress is not allowed. $16 million

2011 Jaguar XJL Supercharged, cause I loved it! $8 million

A business I bought in 1999 it failed but it taught me that I could build something up. $10 million

Sailing lessons. $8.5 million

New business equipment. It extended the life of my employees and gave them a sense of pride. $7 million

Therapy sessions (to help me overcome a traumatic experience). $5 million

I would say travel with my family. Things are forgotten, but memories last a lifetime. $5.2 million

Our dog. $2.4 million

Rolex timeless, lasts forever. $3.5 million

Our home, we raised our family in a house that fit our lifestyle. $3.8 million

Strategically located land in Charlotte when no one wanted to hold real estate (especially land). $1.6 million

My golden retriever puppy hes an incredible companion and is almost certainly why those 25 year-olds are flirting with me! $7 million

Tesla. Its an amazing piece of engineering and technology. $3.45 million

Oriental rugs because it is important to surround yourself with things you love $6 million

Trip to Europe for my husbands 40th birthday. The memories are better than anything tangible I could have bought him. $2 million

House in Plaza Midwood in the late 1990s. We love living here and it has appreciated with the growth of the neighborhood. To me the most important purchases are things you use every day. $3.4 million

Custom suit look good when you need to. $3.6 million

My airplane. Besides being fun it allows us to travel and see family and friends we may not otherwise see. $1.54 million

Engagement ring ($10k). She is my everything and a big part of the reason we have financial wealth. $2.2 million

My boat. It allows me to get away from the stress of everyday life. $1.5 million

Probably our house. We purchased it at 24 and 26 in an area as close to Uptown as we wanted to spend (note, we set our own budget which was $150k under what we were qualified for). The neighborhood has steadily improved and now we have quite a bit of equity. $1 million

Help around the house cleaning service, yard service, etc you dont want your home to feel like a to-do list after youve been at work all day. $1.3 million

Husbands golf clubs same reason as my yoga mat! When you have a stressful job, find something that you love & brings you peace. $3 million

Every one of my top five vacations. Seeing the world expands your knowledge and awareness. $2.03 million

Cant think of anything Ive bought for over $1,000, other than my car, special vacations, etc. We dont purchase luxury items, we dont try to keep up with the Joneses. $1.5 million

Wedding ring, because marrying the right person is the best investment you can make in life. $8.3 million

The Big Green Egg. The meats. $1.3 million

I spend about $5k on travel every year. The big trips, not the weekends away or going home to visit friends and family. I dont skimp on that stuff. Thats why I do what I do. To be able to travel like I do but even more. I guess also all of the house upgrades (and the house itself). I only make the changes I really want in my house/life so they are true value adds. But you live in it, so spend money on the places where you spend time. I didnt upgrade my kitchen because honestly I dont spend a lot of time there. But the living room and master bath feel like home, feel like extensions of me. $2 million

My first car because it represented my complete financial independence from my parents . $1.7 million

Backyard remodel (patio/fireplace). $1.5 million

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How do Charlotte millionaires spend and invest their money? And what's their best purchase under $100? - Charlotte Agenda

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October 8th, 2019 at 6:48 am

Posted in Investment

Steward lets you help small farms by investing – Fast Company

Posted: at 6:48 am


On Tuesday, October 1, U.S. Agriculture Secretary Sonny Perdue made a grave statement about the lifespan of the countrys small dairy farms.In America, the big get bigger and the small go out, Perdue said after attending the World Dairy Expo in Madison, Wisconsin. This extends to all types of small farming enterprises in the U.S., from fruit and vegetable to grain and livestock, which struggle to make ends meet.

Almost all of the funding from agriculture comes through government policy [and] direct lending, either through the government or bank programs, and those programs arent flexible enough for the smaller, sustainable farms, says Dan Miller, founder and CEO of Steward, a new online crowdfunding platform where individual investors can put money into modest, regenerative farmsand eventually get a return on their investment.

So far, Steward has invested more than $2.2 million across 16 different farms, mostly in the U.S. (though one is a vineyard located in Switzerland). Anyone in the U.S. can invest as little as $100 via an SEC regulated process in what is currently the Steward Farm Trust, a portfolio of loans made to the 16 farmers using Steward. Those who put money into the trust will receive dividends paid from the interest payments on those farmers loans. Shortly, were going to roll out individual investments, so people will be able to invest directly in a single farm, says Miller.

Individual investments so far have ranged from the $100 minimum (from the millennial customer who sees it online, says Miller) to the more traditional investors, who provide as much as $500,000. Investors come from all over the U.S., says Miller, from San Diego, California, to Lawrence, Kansas.

Miller initially got the idea for Steward while working on real estate development projects in Washington, D.C. We were buying buildings, renovating them, and leasing to chefs, he says. A lot of those chefs were younger chefs who were sourcing direct from farmers. Miller ended up meeting some of those farmers and learning how difficult it was for them to access fundingeven when their premium products were largely prized and in demand from local chefs and consumers.

One of those farms is Beilers Heritage Acres, a certified organic grain and dairy farm run by Amish farmer Omar Beiler in Lancaster County, Pennsylvania. His farm spans 110 acres (just under half of which he owns), and its produce winds up in multiple restaurants, including the James Beard award-winning Woodberry Kitchen in Baltimore.

Small dairy farms, as Agriculture Secretary Perdue pointed out, have been struggling financially. Prices have dropped, and theres been an oversupply, says Miller. So we funded that farmer to buy . . . processing equipment, so that he could make butter and cream and sell that to the restaurant. Stewards loan amount to Beiler is $150,000.

Others farms Steward provides loans for include a one-acre urban farm in Detroit, a sustainable livestock farm in Louisiana, and a hemp farm in Oregon. In order to qualify for Steward loans, farms just have to be sustainable and regenerative, both ecologically and in terms of how they operate their businessthey need to be able to support themselves independently.

Though Steward-supported farms are mostly located in the U.S., Miller has plans to expand abroad. As weve tested the model and marketed in other countries, theres been a lot of demand and interest, he says. Its heartening that theres so many people doing this good work, but it also means theres obviously a big gap for funding and much need for that capital.

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Steward lets you help small farms by investing - Fast Company

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October 8th, 2019 at 6:48 am

Posted in Investment

Investing in Tech Stocks: What You Need to Know – The Motley Fool

Posted: at 6:48 am


During years of rampant speculation leading up to the dot-com bubble in the late '90s and 2000-2001, many technology stocks belonged to risky companies unable to turn a profit. Today, however, the tech sector includes companies across the whole spectrum of financial and operational health, from those still striving to become profitable to established cash cows like Apple and Facebook.

Sure, tech stocks are still more volatile than those in more established sectors like utilities and consumer goods, but as long as investors are willing to embrace more volatility, there are some stellar businesses -- and potentially highly rewarding stocks -- to invest in.

The sector, therefore, is worth exploring in detail. By fully understanding what the tech sector entails, including its opportunities and threats, the type of stocks that it includes, how to value a tech stock, and more, investors will be well positioned to identify and invest in the industry's most promising stocks.

Image source: Getty Images.

Tech stocks are the publicly traded shares of companies engaged in selling technology-based services or products. In other words, they represent shares of ownership in technology companies available to buy or sell on the stock market.

Stocks in this sector range from those in older technology industries, such as telecommunications and personal computers, to those in more nascent segments, such as software-based internet services and online social networks.

Their business models vary substantially as well. Some companies manufacture technological equipment, such as routers and computer processors. Others design products but outsource manufacturing. Furthermore, modern organizations have adopted creative ways of selling technology services, including offering subscriptions to cloud-based applications, providing access to online networks in exchange for ad-supported experiences, charging fees for online transactions facilitated through online marketplaces, and more.

There are many ways to break down the tech sector, but perhaps the most useful way for investors to look at the market is through the lens of four types of businesses: software, hardware, internet information, and telecommunication.

These companies make money from selling the programs used by computers. Historically, software was often sold on an la carte basis. More recently, however, customers are increasingly paying for subscription access to software made available over the internet. This business model is often referred to as software-as-a-service, or SaaS.

These companies sell both components for technology products and the finished technology products themselves. Examples include semiconductors, servers, computers, smartphones, consumer electronics, computer peripherals, and data storage devices.

These companies make money from providing content, networks, and marketplaces on the internet. Yelp, for instance, provides both a platform for connecting users with local businesses and information about those businesses. eBay, for another example, provides an online marketplace for users to buy and sell goods on the internet.

This industry includes companies that enable communication, primarily through telephone, data, and video. But companies that connect the world through satellite, radio, television broadcasting, and internet usually fall into this category as well.

Looking beyond this 10,000-foot view of the tech sector, investors who want to buy stocks in this space should be familiar with some of the biggest trends in tech stocks. The following 10 tech trends provide investors with themes to look for as they decide what companies they want to invest in.

Software-as-a-service (SaaS) companies charge customers a subscription or a usage-based fee in exchange for providing access to cloud-based software applications. Many SaaS companies provide software for enterprises, including sales, customer relationship management, inventory management, accounting, and workplace collaboration platforms.

Financial technology companies provide software-based solutions for various financial services. Some examples include mobile banking, digital payments, peer-to-peer mobile payments, and online budgeting and accounting software. Fintech companies often operate with SaaS business models or take a cut of the transactions made on their platforms.

Social media give users access to an online network for connecting friends, family, groups, colleagues, and organizations. Facebook, of course, is the perfect example of a social networking company. Monetization models for social networks vary, but primary approaches include digital advertising, subscriptions, and a hybrid of these two.

The Internet of Things (IoT) refers to internet-connected and software-powered devices. Thanks to technology and continuous improvements in high-speed wireless internet, once-ordinary products such as refrigerators, garage door openers, and healthcare devices now have enhanced capabilities and can be controlled through software via the internet. Internet of Things companies sell these connected devices and sometimes provide software services to assist them.

The convergence of the ability to store massive amounts of data, the continuing evolution of deep learning algorithms, and advancements in graphics processing unit (GPU) computing have brought about an era of artificial intelligence (AI). AI technologies and services can learn, adapt, improve, and act on their own. Examples include voice assistants, self-driving car technology, customer service chatbots, and more. The most relevant companies in this space are the semiconductor companies involved in building the computing power for the evolution of AI. However, AI is quickly finding its way into many different fields, including transportation, risk management, investing, and more.

E-commerce refers to selling physical and digital goods and services online. The most direct beneficiaries of e-commerce trends are online retailers, online marketplaces that enable other businesses to sell their products, and companies that provide platforms for businesses to build their own online shopping experiences for their customers.

Connected TV refers to television streamed over the internet. This space is fast growing because consumers are shifting more of their viewing time to streaming TV as content publishers and advertisers respond to this trend. While Netflix is the most obvious example of a company benefiting from connected TV, many companies have flocked to the space with a wide array of business models.

One of the ways businesses are profiting from connected TV is through digital advertising, or advertising online. It stands to reason that advertisers ultimately want to spend their dollars where the consumer is. Growing smartphone usage, combined with consumer adoption of streaming TV, video, and music services, means that marketers are ramping up their spending on digital ads. Some of the biggest beneficiaries in this market are companies with platforms that help marketers buy and sell ads digitally. However, content publishers also benefit from the revenue produced by ads that run in their content.

Cloud computing refers to the delivery of computing services over the internet. These services come in many forms, including off-premise servers, storage, databases, and networks that can be accessed through the internet. The value proposition for cloud computing companies is that businesses can pay for their usage only, helping organizations never over- or underinvest in their computing capacity.

Semiconductor companies are involved in different aspects of manufacturing, designing, and selling computer processors, such as central processing units (CPUs) and graphics processing units (GPUs).

Two key tailwinds in the tech sector are organizations' digital transformations and the adoption of e-commerce across sectors.

Companies across all sectors are embracing technology in one aspect or another to better their businesses. Cloud computing, AI, and cloud-based software platforms are enabling organizations to improve everything from streamlining back-end operations to making better connections with customers. This embracing of technology across organizations is referred to as companies' "digital transformations."

A wave of nontech companies undergoing these digital transformations is benefiting many tech companies. This is helping supplement demand for cybersecurity, business software, data and analytics, fintech, cloud computing, and AI solutions.

E-commerce remains a major tailwind for many technology stocks. Companies in essentially every sector are embracing e-commerce in one form or another. For instance, airlines are selling tickets on their websites and on third-party travel-booking platforms; brick-and-mortar retailers are implementing digital strategies; and restaurants are rolling out online loyalty programs and delivering food through third-party food-delivery apps.

Some of the tech industries directly or indirectly benefiting from the rise of e-commerce include fintech, business software, cloud computing, and even digital advertising companies.

Two key headwinds for tech stocks are high employee turnover and lower barriers to entry.

According to 2018 data from LinkedIn, employee turnover in tech (software in particular) is higher than in any other industry. The turnover rate in software-related jobs is 13.2%, according to LinkedIn. Turnover rates at jobs in other major industries include 11.4% in media and entertainment and 10.8% in both financial services and telecommunications.

The problem? High demand for tech workers and rising competition within the industry, says LinkedIn's Paul Petrone:

[A]s employers and offers get more competitive, top talent is more eager to jump on new opportunities. The numbers support this theory -- according to LinkedIn data, almost half (49%) of departing tech employees take another job within the tech sector.

While employee turnover itself can lead to issues in building and maintaining a stable team, a greater underlying problem that the competitive environment for tech employees creates is the need for organizations to offer attractive compensation packages, often including stock-based compensation on top of regular salaries. As a result, meaningful stock-based compensation has become a regular business expense at companies like Alphabet and Facebook. For some companies, this can result in significant shareholder dilution over time as the number of total shares increases as a byproduct of share-based compensation.

Capital-intensive industries, such as the auto business, airlines, and railroads, often require significant up-front investment in factories, machinery, and real estate in order to enter the market successfully. This gives incumbents somewhat of a competitive edge, as there are high barriers to entry for new entrants.

On the contrary, for many technology companies -- particularly software providers and internet information providers -- start-ups can morph into significant competition for incumbents in a very short period of time, and often with a surprisingly small amount of capital. Barriers to entry in some technology industries, therefore, are low.

On a similar note, this means large and well-capitalized technology giants such as Apple, Alphabet, and Microsoft can easily deploy new software-based services that could threaten smaller technology companies.

While there are things that are particularly important to look for when analyzing tech stocks, the same fundamentals used for investing in any stock are still applicable. For instance, investors should ensure that a tech stock they are interested in has:

Beyond these fundamentals, other metrics and characteristics that are particularly important for tech stocks include gross profit margin, operational leverage, a broad customer base, and revenue growth. Here's a look at how investors can check out these factors when analyzing a tech stock.

Because the business models in tech vary so greatly across industries (and even within industries), one company may make a significantly different amount of gross profit (revenue minus the direct costs of producing a good or service) on their offerings than others. To put a company's gross profit into perspective, divide gross profit by revenue to get a metric called gross profit margin.

Gross profit margin gives investors insight into the economics of a company's business. The higher the gross profit margin, the more lucrative the company's business model is, as long as it can maintain low operating expenses (incurred expenses that are not directly associated with the goods or services a company sells, such as sales, marketing, and administrative costs). The best technology companies often have gross profit margins that are superior to peers in the same industry.

While many tech companies -- especially software providers -- have high gross profit margins, a large portion of their spending may fall under operating expenses. If operating expenses do represent a large portion of revenue compared to peers, investors should look for evidence of operating leverage.

Operating leverage is present when a company's revenue grows at a faster rate than its operating expenses. This leverage from outsize revenue growth means that, over time, more of the company's revenue will fall to the bottom line, or its net profit after all expenses. When a technology company has operating leverage, the company's business model is considered scalable. In other words, the business's economics improve as revenue increases.

Operating leverage is particularly important when a technology company is not yet profitable on its bottom line. With the help of operating leverage, an unprofitable tech company has a clear path to profitability, as long as revenue can keep growing.

Investors should look at a tech company's customer base. Some tech companies -- such as hardware providers (particularly semiconductor companies or manufacturers of electronic parts) or companies providing software to businesses -- may be highly reliant on a few large customers for a significant portion of their revenue. If the loss of a single customer can have a material impact on the company's business, then it is a risk for shareholders. Investors, therefore, should ensure that business-facing technology companies have an extensive portfolio of clients.

Another key metric often used when analyzing tech stocks is revenue growth. Because many tech stocks are in high-growth industries, quarterly year-over-year revenue growth rates are often closely watched by Wall Street.

Investors can often get an idea of a company's momentum by looking at its trends of revenue growth rates over multiple quarters. For instance, when year-over-year growth rates are higher in one quarter than they were in the previous quarter, the company is seeing accelerating growth. Conversely, a lower growth rate in the current quarter compared to the previous one means the company is seeing decelerating growth.

An accelerating growth rate is often indicative of a strong tailwind or catalyst for the business. When investors see this trend, they may want to do more research to see what is behind this momentum. On the other hand, decelerating growth rates could suggest a tailwind or catalyst is losing its luster; while decelerating growth is not always bad, investors should be aware of why growth is slowing down.

For the most part, investors should approach valuing tech stocks in the same manner they would value any stock. A price-to-earnings ratio, or the ratio of a company's share price to its earnings per share, can give investors an idea of how the stock is priced relative to its underlying profit. Similarly, a price-to-book ratio, or the ratio of a stock's price to its book value per share (assets minus liabilities divided by shares outstanding), helps investors understand the premium a company's stock price commands relative to its underlying book value. Investors can look at these common valuation metrics for a given company and see how they compare to its industry peers.

But there is one metric that may be particularly useful when valuing tech stocks: price-to-sales, or the ratio of a company's market capitalization (shares outstanding multiplied by share price) to its total sales. This metric helps investors view the premium at which a company trades relative to its sales. A high price-to-sales ratio relative to peers usually suggests that investors think sales will grow faster than its peers' will. A lower price-to-sales ratio, therefore, is usually evidence that the market believes a company's sales will grow slower than its peers'.

While the price-to-sales ratio is far from perfect, it's useful when comparing members of an industry to one another. For instance, an investor can compare a given company's price-to-sales ratio to the average price-to-sales ratio of stocks in that industry.

A price-to-sales ratio is especially useful for many tech stocks because tech stocks within the same industry can be at dramatically different stages of profitability due to the high operating leverage some tech stocks have. For example, an upstart in fintech with $200 million in revenue is likely not yet profitable. Meanwhile, a more established fintech company with $15 billion of annual revenue may be bringing in $2 billion of profit every year because it has scaled its business enough to achieve meaningful profits. In this case, comparing the two stocks' price-to-earnings ratios would not help. Looking at their price-to-sales ratios, however, could prove to be more useful when trying to understand how the market has priced these stocks relative to their underlying businesses.

Two of the biggest opportunities for many tech stocks are the subscription economy and the integration of technologies into new business models.

An interesting opportunity in tech is what is being referred to as the "subscription economy." Zuora, a company that is at the heart of this trend as a provider of technology that enables companies to transition to subscription-based business models, defines the subscription economy as "the idea that customers are happier subscribing to the outcomes they want, when they want them, rather than purchasing a product with the burden of ownership."

Technological advancements are making it easier than ever for businesses to offer customers subscription options to get access to both digital and physical goods.

Many new technology companies exist due to the careful integration and combination of a handful of key technologies. As software becomes more powerful (thanks to innovation and iteration in computing and programming and faster wireless data transfer speeds), there are always new ways to implement software to solve problems or create new opportunities. For instance, for the ride-sharing industry to exist, it required wireless internet, mobile payment, global positioning systems (GPS), smartphones, and mapping software.

As new and existing technology companies find more ways to combine various technologies, they will be able to improve current offerings and launch entirely new ones.

Two of the biggest risks for tech companies are regulatory scrutiny and overseas manufacturing.

Recently, regulatory scrutiny among tech stocks has been a headwind for the sector. Data and privacy, in particular, have been seeing more scrutiny from regulators. This scrutiny could present challenges for many technology companies, considering how critical the transfer and use of customer data is to many of their business models.

Many tech companies produce products or source parts outside the U.S. to save money on labor costs. Not only does this make these companies more reliant on a country with different laws and business practices, but it could be a risk if the U.S. government's trade relations with that country deteriorate. For example, recent U.S.-China trade tensions have put pressure on some hardware technology companies that are reliant on parts from China to find ways to manufacture or buy these parts in the United States.

With all of this background on the tech sector and tech stocks in mind, let's look at some examples of major tech companies. Here are the 10 largest American tech stocks based on market cap, as of September 2019:

Company

Market Capitalization

Revenue (TTM)

Net Income (TTM)

1. Microsoft (NASDAQ:MSFT)

$1.07 trillion

$125.8 billion

$39.2 billion

2. Apple (NASDAQ:AAPL)

$964 billion

$259.0 billion

$55.7 billion

3. Amazon.com (NASDAQ:AMZN)

$911 billion

$252.1 billion

$12.1 billion

4. Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL)

$841 billion

$148.3 billion

$34.7 billion

5. Facebook (NASDAQ:FB)

$545 billion

$62.6 billion

$17.1 billion

6. AT&T (NYSE:T)

$262 billion

$183.5 billion

$17.4 billion

7. Verizon Communications (NYSE:VZ)

$242 billion

$131.1 billion

$16.4 billion

8. Intel (NASDAQ:INTC)

$222 billion

$70.4 billion

$19.7 billion

9. Cisco Systems (NASDAQ:CSCO)

$207 billion

$51.3 billion

$13.2 billion

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Investing in Tech Stocks: What You Need to Know - The Motley Fool

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October 8th, 2019 at 6:48 am

Posted in Investment

PepsiCo Is Investing Where It Counts – The Motley Fool

Posted: at 6:48 am


Investors have been very upbeat about PepsiCo's (NASDAQ:PEP) prospects this year, as the company invests in areas to accelerate sales growth and position itself for sustainable long-term returns.The stock is up 28% so far in 2019 and the latest results seem to have met the already high expectations investors have for the snack-food giant.

Let's look at a few highlights from the fiscal third-quarter earnings report that has investors so optimistic.

IMAGE SOURCE: PEPSICO.

Starting with the top line, organic (non-GAAP) revenue increased by 4.3% year over year.This is slightly below the year-ago quarter's 4.9% increase, but it's still impressive for this global brand powerhouse to post more than 4% growth on top of the strong results in last year's third quarter.Year to date, Pepsi's organic revenue is up 4.6%, which is better than the 3.4% growth reported for the same period this time last year.

Core earnings per share (EPS) on a constant-currency basis were down 1% year over year for the quarter and down 0.5% year to date.However, core EPS of $1.56 beat analysts' estimates by $0.06 per share.

Explaining the backdrop for the strong results, PepsiCo CEO Ramon Laguarta said, "We are making good progress against our strategic priorities and our businesses are performing well as we continue to make the necessary investments in our capabilities, brands, manufacturing and go-to-market capacity to propel our future growth."

The stock continues to soar despite the lower earnings because investors understand that the investments in marketing and additional capacity are putting the company's brands on offense against competitors. Marketing expense is up 12% year to dateand is being directed toward Pepsi's most important brands and geographies.

The Frito-Lay business, which comprises the company's snack food brands in the U.S. and Canada,saw organic revenue increase by 5.5%, enough to gain market share in the quarter.Management noted strong growth in core brands, such as Doritos, Cheetos, Ruffles, and Fritos.Smaller premium brands, including Bare and Off the Beaten Path saw double-digit revenue growth.

The most impressive aspect of these results was the balanced performance across all channels -- grocery, mass, club, convenience, foodservice, and e-commerce-- which is not an easy thing to accomplish given the complexity of managing dozens of brands across different sales channels, especially with competitors trying to grow sales, too.

The North American beverage business saw an acceleration last quarter, improving from organic revenue growth of 2.5% in the fiscal second quarter to 3% in the third quarter.Management is especially pleased with the performance of Gatorade, which gained market share. Gatorade Zero has been a very successful new innovation, exceeding $500 million in retail sales since launching last year.

Pepsi is making investments internationally to drive higher per-capita spending and increase market share, and the results show the efforts are paying off.Organic revenue from developing and emerging markets increased by 7% year over year, including double-digit growth in Mexico, Saudi Arabia, China, Turkey, and Pakistan.

Laguarta's comments during the fiscal third-quarter conference call suggest that Pepsi may still have a few more gears to shift into to accelerate sales growth:

We're invested to increase the capacity and reach of our go-to-market systems with substantial investments in new routes, merchandising racks and coolers, and we're investing in additional manufacturing capacity to remove bottlenecks and expand growth capacity for our brands. These include investments in new plants, new lines and added distribution infrastructure.

Pepsico is also investing in technology, highlighted by the strength in the company's digital sales capabilities. E-commerce is on pace to generate nearly $2 billion in revenue this year.

Management put the cherry on top for the quarter by raising sales expectations for the year. The company now expects to meet or exceed 4% organic revenue growth for the full year.Core EPS should be down 1% in 2019, but free cash flow is expected to be approximately $5 billion.

The company plans to return $8 billion to shareholders through dividends and share repurchases.On the surface, that looks unsustainable, since a business can't continue to distribute more than it brings in year after year. But investors should look at the excess return as a vote of confidence from management in the long-term expectation that free cash flow and net income will move higher.

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October 8th, 2019 at 6:48 am

Posted in Investment

ESG Investing: Is Southwest Airlines a Responsible Investment? – The Motley Fool

Posted: at 6:48 am


The airline industry isn't the first place an investor might think to go in search of a company that scores well on environmental, social, and governance issues. Many environmental advocates view global air travel's enormous carbon footprint as needlessly wasteful, and amid numerous bankruptcies and consumer protection failures among major airlines throughout the industry's history, employees and customers alike have often found their lives disrupted.

Yet within the industry, Southwest Airlines (NYSE:LUV) has long stood out from the crowd. The airline looks a lot different than it did back in the early 1970s, when Southwest took advantage of a gap in federal regulatory coverage to offer intrastate air travel between key cities within the state of Texas. Once airline deregulation became reality, Southwest began to broaden its scope, moving first to serve key U.S. markets outside Texas and then looking beyond the nation's borders. Currently, Southwest helps travelers visit more than 100 destinations in the U.S. along with 10 countries internationally. Key cities include Chicago, Baltimore, Las Vegas, Denver, and Southwest's home market in Dallas. Southwest now counts itself among the top airlines in the nation, and its No. 11 on Fortunes list of the Worlds Most Admired Companies in 2019.

Image Source: Southwest.

Southwest has embraced ESG principles throughout its history, even before most investors paid much attention to those concepts as being critically valuable to a company's long-term business prospects. The company's efforts to embrace its employee base date back to its origins. Southwest's more recent efforts to modernize its aircraft fleet to become more fuel-efficient have aimed at the joint goals of cutting costs and reducing environmental impact. Those types of initiatives are exactly what ESG investors like to see, because they show that investing with ESG principles in mind doesn't have to be inconsistent with traditional work to maximize profits.

The recent death of co-founder Herb Kelleher was a sad occasion for Southwest, as the airline's former CEO stood as an example for airline employees to give their best and always try to put passengers first. But the awareness of Kelleher's legacy at the airline has given current Southwest employees new inspiration to keep the spirit of what he helped to build alive and well for generations to come. Let's analyze Southwest using The Motley Fool's 10-question ESG framework.

Yes. Southwest expresses its mission simply: putting people first. That includes not just its passengers and its workers but also the broader communities that the airline serves. Southwest's annual One Report sets out its sustainability objectives and lists some of its achievements, and although the company doesn't have a perfect record, it has done a good job of balancing the needs of its various stakeholders.

Southwest knows that its employees are the gateway to delivering high-quality customer service to its passengers, so it works hard to focus on workers' needs. Employees earned $544 million through Southwest's profit-sharing program in 2018 as partial compensation for serving a record 134 million passengers.

Yet money is only one element of Southwest's approach to working with its employees. The company's culture is designed to put a smile on everyone's face -- a necessary goal in the often-frustrating world of air travel. Southwest put on more than 4,000 "celebrations" in 2018, including "fun flights" and "gate games" to keep passengers amused. Although customers benefit from those efforts, the fun also creates a work environment that resonates well with workers.

Southwest's attention to its workers also pays off for the communities in which it operates. The company's Adopt-A-Pilot program has involved nearly 600,000 students since its inception in 1997, and employees volunteered nearly 190,000 hours to help the causes most important to them. That resulted in the donation of more than 3,400 tickets through the Tickets for Time program, which donates a round-trip ticket for every 40 hours of volunteer time that employees work with a qualifying organization. Southwest has also given travel assistance to medical patients in need, with payments totaling more than $27 million since 2007.

Employees have rewarded Southwest with a great reputation, and the airline was ranked No. 10 on Glassdoor's 2019 list of Best Places to Work and No. 2 on Forbes' 2019 list of America's Best Large Employers.

Yes. The airline industry is energy intensive and draws criticism from many environmental advocates. Yet Southwest has taken several steps to reduce its impact on the environment. The airline has improved its jet fuel efficiency by nearly 33% since 2005, and Southwest boasts seven straight years of improving its emissions intensity ratios. By spending more than $600 million in efforts to boost fuel efficiency since 2002, Southwest saved nearly 13 million gallons of fuel in 2018.

Beyond fuel, airlines have the potential to produce large amounts of waste. Yet Southwest has aimed to make improvements there too, looking for ways to recycle and reuse materials whenever possible. The airline recycled more than 3,750 tons of material in 2018, including 193 tons of electronic waste that's especially difficult to dispose of properly.

Southwest is also reaching out to communities to make a difference on environmental issues. The company boasts 60 environmental projects in 22 states, including partnering with the Student Conservation Association to plant thousands of trees, flowers, and shrubs. Its efforts have helped conserve 136,000 square feet of parks and public green spaces.

Going forward, Southwest has higher ambitions. It hopes to introduce more use of sustainable aviation fuel starting in 2020, and efforts to work with environmental partners on new opportunities should keep Southwest moving in the right direction.

Areas for improvement: Southwest could do more to find greener fuel alternatives, including biofuels, to further reduce its carbon footprint.

Yes. Southwest has built an inclusive environment on three pillars: team, value, and respect. The airline acknowledges that each of its 58,000 workers brings a unique perspective to work, and the company's culture relies on creating an environment in which every one of those workers feels valued and included.

Those efforts take shape in different ways. Southwest's diversity and inclusion team hosts monthly events called Power of Inclusion, which bring workers together to learn more about certain ideas. Highlights in 2018 included themes celebrating Black History, Asian American and Pacific Islander Heritage, and LGBTQ pride. That last point is consistent with Southwest's perfect 100 rating on LGBTQ equality on the Human Rights Campaign Corporate Equality Index. More broadly, individual workers at Southwest have opportunities to take their specific talents and put them to work in creative ways to help serve the common goal of treating customers better.

Areas for improvement: According to the companys website, its board of directors has 11 members and 3 are women, giving the board a 27% gender diversity ratio. The company should aim to improve this balance by setting a goal of reaching a 50% gender diversity ratio.

Yes. Southwest is committed to maintaining ethical business practices at the highest level. Its code of ethics stresses the need to comply with legal and regulatory requirements while acknowledging the value of honesty, integrity, and personal responsibility.

Specific ethical issues that Southwest calls out include:

Southwest holds all of its team members accountable for reporting illegal or unethical behavior to a wide range of different leaders, department heads, and officers of the company.

Yes. Southwest views many of its business accomplishments from the perspective of how they promote environmental, social, and governance principles. For instance, within the airline industry, the fact that Southwest has been profitable for 46 straight years is unusual, and it might seem like a win primarily for shareholders in the company. Yet through its profit-sharing program, Southwest shares its earnings with its employees, so the entire corporate community benefits from the work that employees do to maximize the airline's bottom line.

Southwest believes that it does a better job of operating its airline than its rivals do, so its expansion efforts directly serve the needs of its employees, passengers, and communities. For example, Southwest has dramatically expanded its network in recent years, serving more communities in Central America and the Caribbean. The airline just added service to Hawaii as well. Because of the structure of its network, more than three-quarters of its customers flew on nonstop flights, improving the service demanded by its passengers.

As controversial as Boeing's (NYSE:BA) 737 MAX aircraft has been, Southwest's investment in the new model sought to improve efficient operations further. Throughout its history, Southwest has focused almost exclusively on 737 models for its fleet, allowing it to concentrate its maintenance and training efforts on a single type of aircraft rather than having a wider range of aircraft for its various worker groups to master.

Operationally, Southwest has spent a lot on making sure its employees can do the best job possible. In 2018, the company opened an 800,000-square-foot facility that includes extensive training opportunities for pilots and other operational teams. Workers spent more than 2 million hours in training during the year to enhance their knowledge and serve passengers better.

Yes. Airlines are notorious for having extremely debt-laden balance sheets. That makes sense, given the capital-intensive nature of investing in costly aircraft expected to operate for decades into the future. In particular, with so many airlines spending heavily on updated aircraft, debt-to-equity ratios are soaring through the roof at many of Southwest's closest competitors.

Yet Southwest itself is in much better financial shape. The company boasted nearly $4 billion in cash and short-term investments as of June 2019. That's more than enough to cover the $1.84 billion in long-term debt and the $1.68 billion in outstanding long-term capital leases with money left over. With almost $10 billion in shareholder equity, Southwest has provided a financial model that most airlines can only aspire toward achieving over the long haul.

Yes. Southwest has worked hard lately to find new opportunities for organic sales growth. Although the airline has a history of working domestically to expand service gradually over long periods of time, the past several years have seen a huge shift in the direction of expansion toward international destinations. Now, Southwest passengers can fly to Belize, Costa Rica, Jamaica, Grand Cayman, Dominican Republic, Turks and Caicos, Aruba, Cuba, and several locations in Mexico. Given that the International Air Transport Association expects air travel demand worldwide to grow at a 3.5% average annual rate over the next 20 years and that much of that growth will come outside the U.S., Southwests move seems like a smart one.

Southwest also saw profit potential in breaking into the Hawaii air market, and it just started offering service in 2019 from the U.S. mainland to the island state. The airline is also giving passengers the ability to fly from island to island once they reach Hawaii, with flights out of Lihue on Kauai, Kahului on Maui, and Hilo and Kailua-Kona on the Big Island, in addition to Honolulu. Southwest hopes that by offering comprehensive service, it can capture more passenger traffic from the mainland and make the most of the growth available on the islands.

More broadly, Southwest's ESG mentality should be a key element of its future growth. For decades, the airline has relied on its corporate culture to help it stand apart from its peers. Even now, business practices like refusing to charge a standard baggage fee from the first bag make it far different from nearly all of its competitors. At a time when other major airlines are adopting far less passenger-friendly policies in their pursuit of profits, Southwest's no-frills approach has done a much better job of preserving the quality of service that has deteriorated so badly aboard some of its rivals' planes.

Yes. Even with the costly nature of the airline industry, Southwest has sustained gains in free cash flow and kept its returns on invested capital healthy. In the 12 months that ended in June 2019, Southwest posted FCF of $2.94 billion, roughly flat from 2018 levels but up dramatically from the $1.68 billion the airline saw in 2017. Total operating cash flow has tripled since 2011, showing the extent to which Southwest has fought to maintain its leadership position in the airline industry.

Southwest has kept investing in its future, but its returns from its investments remain healthy. In 2018, the company posted a 23.6% ROIC on a pretax basis, and that worked out to an 18.4% ROIC figure after tax. That's far better than the single-digit-percentage figures that prevailed throughout much of the 2000s and early 2010s, and it speaks to the work that Southwest has done to concentrate on its most promising investment opportunities in directing capital expenditures aimed at growth.

Yes. It's hard to overstate the impact Kelleher had on Southwest Airlines before his death in early 2019. From its beginning in 1971, Southwest's mission was to make flying more affordable for everyday passengers, taking advantage of an intrastate exemption from air travel regulations to offer cheaper flights serving markets within Texas. Southwest never felt the need to offer the same frills that other airlines did, but it did prove to be prescient, as its rivals have largely stopped offering the additional services they once provided -- or at best have started to charge exorbitant fees to continue providing them.

Instead, Kelleher focused on the employee experience, ensuring that the brand ambassadors who passengers see on the front lines every day are delivering a positive message. As Doug Parker, CEO of American Airlines Group (NASDAQ:AAL), said after Kelleher's death: "If you take care of your people, they will take care of your customers, which will take care of your shareholders. That simple yet profound way of leading continues to inspire us, and we aspire to honor Herb's example."

At first glance, Kelleher's legacy might seem to be focused on reducing profit growth. After all, Southwest remains the only major carrier not charging a fee for those who want to change their reservations after purchase. It's also the most prominent airline not charging baggage fees on the first bag a passenger checks. Many have criticized Southwest for missing out on what for other airlines has been a gold mine from ancillary fee revenue.

Yet current CEO Gary Kelly has his vision squarely focused on continuing the work Kelleher started, which means not compromising on the mission that the airline has at its core. Even now, you won't find Southwest flights at some of the most popular online travel websites, because the airline wants to drive traffic to its own website. That costs it some business, but it also teaches passengers that they need to check Southwest.com in order to complete their research on the cheapest way to travel.

Specifically, Southwest encourages efficient operation and has allocated capital toward investments to boost efficiency. Kelly and his team are committed to the honest and transparent manner in which Kelleher began operating Southwest half a century ago. Most importantly, Southwest employees value the company that they've built, and they know that their work is essential in order to preserve its competitive advantages and continue to stand out from the airline crowd.

Yes. Southwest has done a good job of avoiding the risks listed in The Motley Fool's ESG Framework. Healthy levels of debt and solid financials mark its recent experience, and leadership has been resolute in its approach toward running the company. Although the airline does have exposure to fuel prices and cyclical ups and downs in the economy, there are extremely high barriers to entry for rival airlines to challenge what Southwest has created.

If anything, long-term trends favor the company. Despite recent trade hiccups, globalization remains a powerful force around the world, and rising demand for travel should keep Southwest growing. Southwest's customer service is unparalleled, and its corporate culture is attractive to workers looking to the airline industry for employment. Kelly's success in taking over as CEO points to the strength of the succession plan that Kelleher and Southwest put in place.

The biggest threat to Southwest recently has come from calls for greater regulation of the airline industry. High-profile accidents involving the 737 MAX aircraft have raised questions about whether aircraft manufacturers have proper oversight, and changes could have implications not just for Boeing but also for the carriers that use its aircraft most extensively. Yet even with the 737 MAX's woes, few have suggested that Southwest itself faces any reputational risk just because it has traditionally concentrated its aircraft purchases on the 737 model line.

Moreover, even the 737 MAX issue is one on which Southwest has shown its true colors. The company said that it's working with Boeing on a settlement that will compensate the airline for the damages it's suffered as a result of the grounding of the aircraft, and it intends to share part of whatever Boeing pays Southwest with its own employees. As Kelly noted, "I recognize this hasn't just affected some of you; it has affected all of you."

Southwest has made an effort toward achieving nearly all of the goals that an investor who follows environment, social, and governance issues wants to see. Some might reasonably disagree about whether the airline really deserves an unqualified "yes" answer to some of the questions above. For instance, it wouldn't be completely unreasonable for an ESG investor to rule out investing in the airline industry entirely because of the huge carbon footprint that air travel involves by its very nature.

We'd suggest a couple of areas for improvement. First, gender diversity could be improved, with just 3 out of 11 directors and barely a quarter of its 62 senior management committee members being women. Getting those proportions up to somewhere between one-third and one-half would be a good goal.

Second, one of the biggest expenses an airline has is fuel, and there's room for Southwest to invest more in finding eco-friendlier alternatives to conventional jet fuel. We're optimistic about its plans for 2020 to purchase 3 million gallons of sustainable fuel, and it'll be interesting to see how those purchases scale up in future years.

No company is perfect when it comes to ESG issues. But at least when you look within the airline group, it's hard to find an industry player that makes a better ESG case than Southwest Airlines. With its business success, its constant efforts to improve, and its unmatched corporate culture, Southwest has put itself in position to thrive for years to come.

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October 8th, 2019 at 6:48 am

Posted in Investment

Fear of a recession ‘bodes well for the stock market,’ Ariel Investments Co-CEO Mellody Hobson – Yahoo Finance

Posted: at 6:48 am


Recession fears can wreak havoc on retirement plans and nights of sleep but they also can do wonders for the stock market, says the leader of a multi-billion dollar investment firm.

In a newly released interview, taped last month, Ariel Investments Co-CEO Mellody Hobson says worries of an economic downturn offer up a trading opportunity that some may not expect.

The fact that we are on recession watch probably bodes well for the stock market in a very weird way, she says.

Hobson, a longtime proponent of value investing and admirer of Berkshire Hathaway (BRK-A,BRK-B) CEO Warren Buffett, invoked her financial role model to explain why.

As Warren Buffett says, the market climbs a wall of worry. And that worry that is out there continues to create opportunity, she says.

On Friday, a mixed jobs report functioned as an economic Rorschach test,confirmingthe recession fears of some whileallayingthe doomsday concerns of others. On the whole, marketsrallied on the news. The jobs report came after a week of troubling data that includes adropin manufacturing activity for the second consecutive month and a World Trade Organizationpredictionthat global trade will fall dramatically.

When panicky investors turn their backs, that gives savvy traders a chance to find undervalued stocks, Hobson said.

Ariel Investments Co-CEO Mellody Hobson appears on Influencers with Andy Serwer.

Even though we've had this tremendous run in the stock market over the last decade, we're still finding value, because when companies disappoint, they basically get shot, she says. They get left for dead. And it's those businesses that get left for dead that create an opportunity for us as value investors.

Hobson is the co-CEO of Ariel Investments, a firm with assets totaling $12.9 billion, where she worked for nearly the past three decades. HerTed Talkon challenging racial inequality, given in 2014, has been viewed more than 3.7 million times.

She made the comments during a conversation that aired in an episode of Yahoo Finances Influencers with Andy Serwer, a weekly interview series with leaders in business, politics, and entertainment.

For her part, Hobson said she does not see evidence of an impending recession.

We might see the economy slow, but we're not seeing a recession, she says. We just don't see it right now.

Speaking before the release of Octobers jobs numbers, she said the recent employment data suggests an economy with strong upsides.

When you look at some basic statistics, the employment numbers are so compelling. We've seen some wage inflation, which helps with consumer spending. Consumer confidence has stayed very, very high. There are a lot of positives.

I would say that my view right now is, the market certainly is fully valued, she adds. However, we think the fundamentals, especially in the U.S., are still very good.

Andy Serwer is editor-in-chief of Yahoo Finance. Follow him on Twitter: @serwer.

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Fear of a recession 'bodes well for the stock market,' Ariel Investments Co-CEO Mellody Hobson - Yahoo Finance

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October 8th, 2019 at 6:48 am

Posted in Investment

This Peer-to-Peer Real Estate Investing Platform Is Changing the Mortgage Game – Futurism

Posted: at 6:48 am


Technological advancement often brings disruption and democratization. It replaces the old with the new and facilitates the rapid expansion of access to specialized tools and information that previously had been the purview of a select few. And nowhere is this more true in the 21st century than the financial services industry. The first big wave came when online trading platforms like E-Trade democratized stock market investing. Now, newer fintech startups like PeerStreet are using crowdfunding technology to revolutionize the world of real estate investing.

How?

In the past, if you wanted to borrow a large sum of money to start a business or buy a house, your only option was to go to a bank and apply for a loan. Thus, only banks had access to highly profitable debt investments. And, obviously, they had no interest in letting anybody else have a share of that pie. However, in reality banks are just middlemen. They make a profit by loaning out the money they get from everyday people.

Now companies like PeerStreet are using technology to remove the middlemen. And its a pretty huge deal.

PeerStreet is a peer-to-peer real estate investing platform that uses technology popularized by sites like Kickstarter and GoFundMe to create a revolutionary new microlending system. Its crowdfunding for mortgages that breaks standard real estate loans into smaller pieces that individuals can purchase. Investors get to earn 10-percent or more on their investments, and borrowers get the money they need to buy a house or run a business.

By doing this, PeerStreet connects investors with borrowers in a way never before possible, busting the centuries-old monopoly on real estate-backed debt investments that banks have enjoyed.

The entire process is guided by high-tech data analytics. PeerStreet shops for loans from reputable private lenders across the United States. Then they use their own proprietary AI analytics engine to evaluate each loan and curate a pool of safe, high-quality real estate debt investments. PeerStreet then sells pieces of these loans to its investors.

Of course, curating a pool of loans is only the beginning. PeerStreet also uses award-winning Automated Investing technology to take the guesswork out of building investment portfolios. With PeerStreets Automated Investing, all you have to do is select your investment criteria, such as interest rate or loan term, and you will be notified when loans that meet your criteria become available.

Unfortunately, because peer-to-peer investing is relatively new, right now the PeerStreet platform is only available to accredited investors. According to current SEC regulation, accredited investors are individuals with a net worth greater than $1 million or an annual income greater than $200,000.

Luckily, if you dont fit into that category, theres reason to hope things might change soon. Back in 2015 the SEC officially opened up the crowdfunding marketplace to non-accredited investors. There are still strict rules in place that limit the amount you can invest per year to either $2,000 or 5% of your yearly income or net worth, whichever is greater. But thats way better than nothing. And it means PeerStreets revolutionary automated investing tech might one day be available to everyone.

Futurism fans: To create this content, a non-editorial team worked with an affiliate partner. We may collect a small commission on items purchased through this page. This post does not necessarily reflect the views or the endorsement of the Futurism.com editorial staff.

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This Peer-to-Peer Real Estate Investing Platform Is Changing the Mortgage Game - Futurism

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October 8th, 2019 at 6:48 am

Posted in Investment

Ready investment blueprint to have a stress-free retired life – Livemint

Posted: at 6:48 am


Retirement is like a long vacation in Las Vegas. The goal is to enjoy it to the fullest, but not so fully that you run out of money," says British author Jonathan Clements. What can help you to ensure that you dont run out of money is having a two-pronged investment strategy that ascertains that you have adequate monthly income and at the same time, your corpus lasts long enough so that you never really fall short. You can do this by splitting your corpus in a way that you have regular income and are also able to accumulate for the future.

Regular income

According to Mumbai-based certified financial planner and author of Mindful Retirement Kiran Telang, One part of the retirement corpus should go into a pool that will generate a fixed regular monthly income. This will go into fixed-income instruments."

For regular income, your options are investing in fixed-income products such as Senior Citizens Savings Scheme (SCSS), post office monthly income scheme (POMIS), bank fixed deposit (FD) and liquid- or ultra short-term debt funds.

SCSS is an ideal choice for seniors looking for regular income and it offers higher returns (8.60% per annum) as compared to other similar instruments. Invest in SCSS to get safe, fixed and regular cash flow," said Anuj Shah, chief financial planner, Wealth 360, a Mumbai-based financial planning firm. The investing tenure of SCSS is five years, which can be extended by three years once it matures. The interest is payable quarterly and is fully taxable.

However, investment in SCSS also gives tax benefits under Section 80C. Invest 15 lakh with you as the first account holder and wife as the second holder. Open another SCSS of 15 lakh with the spouse as the first holder and you as the second," said Anuj, talking about how to maximize tax benefit. SCSS also offers the highest post-tax returns compared to other fixed-income products such as five-year tax-saving FDs and National Savings Certificate (NSC).

Another safe and regular income-generating product is POMIS, which has a five-year tenure and gives an interest of 7.6% per annum payable monthly. The investment limit is capped at 9 lakh under joint ownership and 4.5 lakh under single ownership," said Anuj. However, this comes without any tax benefit at the time of investment. The interest is fully taxable and it also has a lock-in period of five years.

Bank FDs are also a popular choice for retirees with tenures ranging from one to 10 years. Currently, State Bank of India (SBI) gives a rate of 6.75% per annum for its three-year FD. Most banks offer senior citizens an extra 0.25-0.50% per annum than regular FDs. For instance, SBI offers 0.50% extra to senior citizens. With FDs, you can choose different tenures and pace out the maturity as per your time frame. However, compared to SCSS and POMIS, interest on FD is lower and fully taxable. But remember, senior citizens can also claim deduction on interest earned up to 50,000 in a single financial year under Section 80TTB from all these instruments.

Then there are annuity plans. To start getting immediate annuity from a life insurance company, you need to make a lump sum investment. There are a number of options to choose from, like an annuity for life, annuity with return of purchase price, life annuity that increases by 5% every year with a return of purchase price on death, and life annuity that increases by 5% every year without return of purchase price on death. An annuity that increases every year tries to play catch-up with inflation, thus helping you more or less maintain the same standard of living.

However, most financial planners consider it the last option due to low returns and lack of liquidity. We do not recommend an annuity plan strongly. But it depends on the nature of the investor; if that person is comfortable with the assured income and he doesnt want to take the risk of longevity, then annuity can be a good product for him," said Rohit Shah, founder and chief executive officer, Getting You Rich, a financial planning firm. However, one should also keep in mind that the corpus is given up forever once you opt for an annuity scheme, added Rohit.

Funds required for the short term can also be parked into liquid or ultra-short debt funds. With debt funds, you have a chance to get higher returns than FDs. Debt funds are also more tax efficient than investment in fixed deposit," said Rohit. Returns from debt instruments are considered as capital gains and enjoy indexation benefits in the long run (if held for more than three years, long-term capital gains are taxed at 20% but after adjusting for inflation), whereas returns from FD are considered as income from other sources and no indexation benefits can be claimed. Systematic withdrawal plans (SWPs) from debt mutual funds can also help you earn regular income. They allow investors to withdraw a specified amount regularly.

Accumulation

When investing and accumulating a retirement corpus, you need to remember two things. One, inflation can eat into a corpus that seems large enough to see you through retirement and two, considering increased life expectancy, it is important to plan and save for a longer retirement period.

To beat inflation and to cater to a long period, it is important to dip into equities. After eight to 10 years, fixed-income part (investments) will not be sufficient. This is when you will need your equity portfolio to come into play," said Telang.

However, you need to choose the equity funds you invest in carefully. Since a senior citizens risk-taking appetite is less, pure equity fund is not recommended. But a combination of equity and debt like hybrid funds can be taken," said Rohit. Apart from equity, one may consider investing in 7.75% RBI savings (taxable) bond, some portion in gold, and also in real estate investment trust (REITs) in sometime," said Rohit.

Remember that the goal should be to enjoy retired life to its fullest, but not exhaust the retirement corpus in the process.

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Ready investment blueprint to have a stress-free retired life - Livemint

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October 8th, 2019 at 6:48 am

Posted in Investment

The transhumanists who are ‘upgrading’ their bodies – BBC News

Posted: at 6:48 am


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Winter Mraz says she loves having her keys in her hand but she does not mean holding them. She has actually had her door key implanted into her left hand in the form of a microchip.

In her right hand, she has had another microchip implant that acts as her business card but could also be used to store important medical information for use in the case of an emergency.

The 31-year-old engineer also has a magnet in one finger that allows her to sense electro-magnetic fields, which she says helps in her work.

But not all her body upgrades are practical. Her latest procedure is to have two LED implants, that turn on when a magnet is passed above them, illuminating her skin from inside.

Why? "Because they are sparkly and I'm a magpie," she says. "I like things that light up."

Winter is one of a growing number of people who call themselves "transhumanists".

It is the belief that the humans can improve beyond their physical and mental limitations and "upgrade" their bodies by incorporating technology.

For Winter, her first "cyber-enhancements" were not voluntary, they were through the hospital after a serious car crash in the United States that fractured her back, both her ankles and her knees.

Her back was bolted together by surgeons and one of her kneecaps was replaced with one that was 3D-printed, on the NHS.

"If it was not for my cybernetic kneecap I would not be able to walk," she told BBC Scotland's The Nine.

After her accident she moved on to voluntary personal modifications such as the microchips in her hands.

The RFID (radio-frequency-identification) chip in her left hand works on the lock in her house door in the same way as many workplace security cards operate. This means she does not have to carry keys and keeps her hand free for her walking cane.

The NFC (near-field communication) chip in her right hand has many potential uses. It is the same type of chip that allows phones and tablets to easily share data with each other.

Winter says: "I think saying that you should not alter your body and you should not change your body is a very ableist way to go about living. People who are disabled don't have that choice. It is made for us."

Steven Ryall, a 26-year-old technical operator from Manchester, says he wants to have chips implanted to make "smart hands".

"We have smart TVs, smart phones, everything is smart," he says. "Why can't I be smart?"

Steven believes that transhumanism is the logical next step in human development. He wants be able to programme the technology in his body to respond to his personal biology.

His "technological baptism" was at a private clinic in Leicester, where he had his first implant.

The microchips are usually delivered by a syringe into the back of the hand.

"I am slowly turning myself into part machine," he says. "I don't mind being biological but if I could be part mechanical that is so much more awesome than just my plain self."

Steven says the chip is "essentially" like those in a contactless bank card. "I can get an RFID or NFC reader and hook it up to a chip that I programme and then get that chip to recognise the chip in my hand and do whatever I want," he says.

Steven is an evangelist for humans "upgrading" themselves but he can understand why people might think it is an extreme thing to do. He says friends and family think it is "weird and kooky" but he believes that in the next five years they will start getting into it too.

Winter says wearable tech such as the Apple watch and Fitbit and other "doctor on your wrist" health monitors have taken off in the past few years and she believes that implants are the next logical step.

She says: "I don't think implants are inevitable but I think they are getting better, longer-lasting, cooler and have more functionality. It's going to be one more option people have."

Steven says he can easily see a time when companies are asking employees to have implants for security ID to access building or computer networks.

"I think that people would see it as an extreme thing because they are looking from a historical perspective, they are not looking forward," he says.

At the moment there are loose regulations on who can do it and most implants are done by tattoo artists and body piercers.

There are some people who are taking things into their own hands by buying the tools off websites to perform the procedure themselves.

Bio-hacker Jenova Rain, who implanted Steven's chip at her Leicester practice, said she was doing five implants a week and the numbers were rising as interest grows.

Although regulations on bio-hacking specifically are sparse, Jenova says she is covered to do implants as a tattoo artist and piercer.

Even though she promotes the idea of upgrading yourself through her YouTube channel and website she has no chips or "upgrades" herself. She says they would be "useless" for her.

Dr Mary Neal, professor of medicine and ethics at Strathclyde University, said she was "not surprised" more people were getting involved but there needed to be better regulation.

She said the procedure was similar to other body modification such as botox but there were many ethical discussions that needed to be had around bodily autonomy and regulation.

Dr Neal also said there were safety risks with people buying the equipment from online sites and doing the procedures from home.

The Scottish government told BBC Scotland's The Nine it intended to regulate procedures carried out by non-healthcare professionals and it was consulting on how this could be done.

A spokesman said it was looking at the "most proportionate and appropriate measures" and the government's priority was the safety of those involved.

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The transhumanists who are 'upgrading' their bodies - BBC News

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October 8th, 2019 at 6:48 am

Posted in Transhumanism


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