Archive for the ‘Phil’s Favorites’ Category

Transparency and privacy: Empowering people through blockchain


Transparency and privacy: Empowering people through blockchain

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Blockchain technologies can empower people by allowing them more control over their user data. Shutterstock

Courtesy of Ajay Kumar Shrestha, University of Saskatchewan

Blockchain has already proven its huge influence on the financial world with its first application in the form of cryptocurrencies such as Bitcoin. It might not be long before its impact is felt everywhere.

Blockchain is a secure chain of digital records that exist on multiple computers simultaneously so no record can be erased or falsified. The redundancy of the system ensures many backups, and the lack of a central storage place ensures there is no one target for hackers. Some suggest that blockchain could become a component of the next generation of the internet.

Many blockchain systems provide a technology called “smart contract:” these are the rules by which records can be accessed and modified by creating new versions. These rules define, for example, who gets access to the stored records, under what conditions, for what declared purpose and in exchange of what (payment or virtual credit). Smart contracts also record every access to the data in the blockchain.

In this way, users can permanently and securely store their data, set their own conditions and control who accesses the data and for what purpose. Because of these features, blockchain technology can be used to store user profile data.

Political scientist and blockchain researcher Bettina Warburg explains blockchain in five levels of difficulty. WIRED Magazine.

Hoarding the data

Currently, social media giants hoard user data and use it to sell targeted advertisements (their main source of revenue). These social media networks don’t give users a real choice or awareness of what data about them are kept. They provide very few control options and no rewards for users in exchange of their data.

Recently, we have seen many cases when user data has been stolen by hackers, leading to breaches of privacy, the possibility for identity theft or exploitation of the data to manipulate people and influence public opinion towards voting. This…
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Leaders always ‘manufacture’ crises, in politics and business


Leaders always 'manufacture' crises, in politics and business

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Trump recently called the border a crisis during a televised address. AP Photo/Carolyn Kaster

Courtesy of Bert Spector, Northeastern University

“This is a humanitarian crisis, a crisis of the heart and a crisis of the soul.”

That’s how President Donald Trump framed his demand for funds to build a “border wall” and end the partial government shutdown. That declaration was met with counter-claims that the crisis at the border was indeed real – but one of Trump’s own making.

I’m currently completing a book on the use and abuse of the word “crisis” by political and business leaders to create a sense of urgency.

While it is true that Trump and his administration are especially reckless in their deployment of the term crisis, they are far from alone in doing so.

Crises galore

You’ve undoubtedly heard nongovernmental organizations talk about humanitarian crises in countries like Yemen and Syria and pundits warn about a crisis in liberal democracy.

And as the Earth warms, the polar caps melt and storms regularly devastate communities around the globe, human beings are said to face an environmental crisis that threatens our very existence. In the world of business, crises arise from declining stock prices, bankruptcy and malfeasance on the part of CEOs.

Some of the instances of crisis claims may seem quite legitimate to you. Others may strike you as dubious. What they all have in common is this: None of them are real things.

‘Uh oh!’ – it’s a crisis

Political leaders frequently use these claims to advance a particular agenda.

For example, in 1964, President Lyndon B. Johnson used the supposed urgency of an attack on an American battleship to rally support for escalating the war in Vietnam. George W. Bush claimed a similar rationale for ousting Saddam Hussein from Iraq in 2001.

In every case, leaders reference real things in their claims: an attack on a battleship, possession of nuclear weapons, the number of immigrants entering a country, the observable effects of climate…
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Trump’s interpreters for Putin meetings face ethical dilemma


Trump's interpreters for Putin meetings face ethical dilemma

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Russian President Vladimir Putin, right, makes a statement, as U.S. President Donald Trump, left, looks on. AP Photo/Pablo Martinez Monsivais

Courtesy of Laura Burian, Middlebury

President Donald Trump met several times with Russian President Vladimir Putin while no other American was privy to the communication except for a State Department interpreter.

In July 2018, Democratic members of the House Intelligence Committee had proposed to subpoena the interpreter and her notes to find out what was said in the meeting, but the motion was rejected by Republican committee members.

Now, reports allege that President Trump took possession of the interpreter’s notes at the end of at least one private meeting with Putin and instructed the linguist not to discuss the content of the meeting with anyone, including other administration officials.

Democrats, now in control of the U.S. House, are reconsidering a subpoena to the interpreter to learn what was said.

I teach M.A. students of translation and interpretation and work as a conference interpreter. Here’s a brief overview of the role of interpreters and the ethics of the profession regarding confidentiality.

‘Strictest secrecy’

The role of an interpreter is to facilitate communication between parties who use different languages.

Interpreters are not responsible for the content of what is said by either party. They are responsible for ensuring that everything that is said is conveyed accurately in the other language.

The code of ethics for professional conference interpreters states that they “shall be bound by the strictest secrecy, which must be observed towards all persons and with regard to all information disclosed in the course of the practice of the profession at any gathering not open to the public.”

Diplomatic interpreters are a subset of these professionals who must pass security clearances, and be mindful of diplomatic protocol and national interests. However, the ethics of confidentiality remains the same in diplomatic settings. Officials must be able to fully trust that interpreters will not reveal confidential information.

Diplomatic tradition has therefore respected the norm that interpreters should not be obliged to give…
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Netflix Slides On Revenues Miss, Light Guidance As It Burns $15 Million In Cash Daily

Courtesy of Zero Hedge

Last October, when Netflix reported stellar Q3 earnings and guidance there were many skeptics who said there is no way Netflix could possibly hit its impressive forecasts. They were right, because moments ago the video streaming company reported Q4 earnings which missed on revenue and revealed light guidance for Q1 even as it reported strong subscriber numbers.

Specifically, Q4 EPS was $0.30 (which included a $22MM non-cash gain on FX remeasurement of Euro-denominated debt), well below the $0.41 reported a year ago if slightly above consensus expectations of $0.24. Revenue of $4.187BN however came in light, missing expectations of $4.21 billion. The revenue miss, according to Bloomberg, "is a sign that all those new shows and movies that Netflix is churning out isn't drawing enough new paying subscribers."

Looking ahead, Netflix reported that Q1 forecast revenue would be $4.494BN, which while 21% higher Y/Y is below the exp. $4.6BN, with EPS of $0.56 also missing consensus expectations of $0.94.

Netflix also announced that Q4 operating margin dropped to 5.2% vs 7.5% a year ago due to "so many titles launching in the quarter."

Perhaps more importantly the company reported a record 8.84 million paid net streaming additions, which while below the 9.40 million guidance from last quarter, is not apples to apples as starting this quarter the company is only reporting paying subs not total subs. That said the paid number was higher than the beginning of quarter expectation of 7.6MM paid subs. That said the number is an 8% increase from a year ago, and will largely be thanks to international subs, which were an addition of 7.31MM in the quarter, up from 5.07MM in Q3, while domestic paid subs rose 1.53MM, up from 1.00MM in Q3.  Finally, for the full year, Netflix added 29MM new paid subs vs 22MM in 2017.

The problem is that in Q1, Netflix expects a decline in International sub growth, from 7.31Mm to 7.30MM, resulting in a total of 88.07 million international paying subs, even as Paid Domestic Subs increase by 1.60MM in Q1 to 60.09 million subs.

In other words, the recent torrid growth pace now…
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Coffee: 60% of wild species are at risk of extinction due to climate change


Coffee: 60% of wild species are at risk of extinction due to climate change

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Courtesy of Adam Moolna, Keele University

Is your morning coffee an espresso or a skinny latte? Is it from a darkly roasted French or Italian blend? If it’s a high quality brew, it’s almost certainly made with beans from the Arabica species (Coffea arabica), which is known for its finer flavours. Examples would be Javan coffees, Ethiopian sidamo, and the expensive Jamaican blue mountain.

If you’ve stirred together an instant blend, it’s probably from a different species, Robusta (Coffea canephora), known for its harsher taste. But there are more than 100 species of coffee in the wild. All produce similar beans that you could make a recognisable coffee drink from.

Robusta is sometimes openly mixed with Arabica in commercial products – and is often secretly used to adulterate “100% Arabica” products, too. A third species, Coffea liberica, native to west and central Africa, is widely grown for local use in tropical countries, but is not globally traded because of its more bitter taste.

A fourth species Coffea eugenoides was bred with Robusta in ancient times to give rise to Arabica, a crossbreed. Another 38 closely related species can cross-fertilise commercial coffees through pollen transfer.

There are a further 82 species which are more distantly related to the commercial breeds, but scientists could interbreed them with commercial coffees in a lab. All these coffee relatives can help enhance the genetic diversity of commercial coffee species, making them more adaptable to changes in their environment.

Arabica coffee beans growing in Colombia. Fotos593/Shutterstock

Dark days ahead for coffee

Climate change is threatening global coffee yields as changing temperatures and rainfall patterns affect plant growth. The changing climate may also be leaving plants more vulnerable to disease.

All major commercial coffee growing countries have been badly affected by the fungal disease “coffee leaf rust”, which spread across Africa and into Asia during the early 20th century, then to South America, becoming entrenched globally by…
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Chicago’s Only 3-Michelin Star Restaurant Offers Clemson Tigers “Special” Victory Meal

Courtesy of Zero Hedge

How many tasting menus would a 300-pound lineman need to consume to feel satisfied? Well, we might be about to find out.

After "Good Morning America" host Michael Strahan, in a pioneering example of what we've termed "lobster signaling", invited the members of the championship Clemson Tigers football team to a "proper meal" of lobster and caviar while criticizing President Trump's now-infamous shutdown-inspired "fast food feast",  Alinea, Chicago's only three-Michelin star restaurant, has decided to one-up the former Superbowl-winning pro football player by inviting the team for a special victory meal at its restaurant.


Of course, given the NCAA's rules against players accepting gifts, it's unclear whether the team will be able to accept the offer. But the restaurant's owner, who specified that he "doesn't care about football", said in a tweet that the special meal would be "what an actual celebration dinner should be" and that it would be "worth it."


To be clear, Kokonas said in an interview with the Chicago Tribune that he doesn't think there's anything wrong with fast food. But he said the football players likely have never experienced "nothing quite like what we do."

"I like a burger as much as anyone else. At the end of the day, though, I’m betting they’ve had that, as football players, a thousand times. I bet they’ve had nothing quite like what we do."

And in a snarky aside directed at Trump, Kokonas said that, though "we are not billionaires", his restaurant group has enough resources to "do it right."

“We’re not billionaires, but we can afford to do it the right way," Kokonas continued. "I’m trying to make this as nonpolitical as possible. For me, this isn’t about politics. It’s about something we can do to correct something I thought was just wrong. That’s it."

We're still waiting for Warren Buffett – another notable McDonald's fan – to invite the entire team to dinner at his favorite Omaha steakhouse.

Stay The Course


Stay The Course

Courtesy of 

“Jack Bogle has done probably more for the American investor than any man in the country.”
– Warren Buffett

I didn’t have any worthwhile mentorship during the first half of my career. It wasn’t until I shed my brokerage licenses and became a fiduciary investment advisor ten years ago that I came into contact with the ideas and philosophies of John C. Bogle, the founder of Vanguard and inventor of the index fund, who died yesterday at the age of 89.

But the way in which he described good investing, the morality behind his message and the unmistakeable truth and clarity with which he explained things changed everything for me. The only people who come across his message and then subsequently disagree with it are those whose careers depend upon their not believing. Bogle had the math on his side, and just about all of the salient facts pertaining to industry conflicts, human psychology and investor behavior.

People mistakenly infer from Jack’s career that he only believed in market-cap weighted indexing. This is a gigantic misunderstanding. What he actually believed, based on over fifty years of experience in the mutual fund business, is that keeping costs low (fees, expenses, tax liabilities, etc) is preferable to any amount of excess return that an active manager might be relied upon to generate. Jack once said he’d rather invest in a low cost active fund than a high cost passive fund. His son actively managed a mutual fund in which Jack himself was an investor. In fact, nearly half of Vanguard’s assets under management are in actively managed funds, such as the Wellington fund, one of the crown jewels of the firm’s collection.

Jack Bogle and Chip Roame, April 2017 in New York City

Registered investment advisory firms like mine created an entire multi-trillion business based on the teachings of Bogle and

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Getting Bogle’s Back


Getting Bogle’s Back

Courtesy of 

This weekend’s Barron’s had a great interview with Jack Bogle of Vanguard. Jack took on some of the more popular myths about the index revolution, including the one where people accuse the popularity of ETFs and the like for pushing up the values of the top ten stocks.

Which is actually illogical when you think about it. Wouldn’t those flows be more meaningful to the thousands of smaller stocks that are also being “bought indiscriminately”? And why, then, are there stocks that were in the top ten recently that have fallen so hard if easy money is just flowing in to buy everything?

Michael and I tackle the topic, the data comes from his blog post here.  Watch the video and make sure you subscribe to our channel at YouTube so you never miss an update!



Jack Bogle’s Battle (Barron’s)

On Second Thought…

The Compound (YouTube)


This post was originally published on May 22nd, 2018

SocGen Weighs Closure Of Prop Trading Unit After Stunning 20% Loss

Courtesy of Zero Hedge

Shortly after BNP Paribas closed its prop trading unit (reminding readers of the financial press that the practice of risking shareholder money for profit continued in Europe after the financial crisis, along with the sometimes enormous consequences of seemingly trivial human errors) and its US commodities derivatives trading unit, the Paris-based bank's smaller cross-town rival SocGen is weighing whether to close its own $4.7 billion prop trading desk after four years of middling-to-abysmal returns, crowned by a 20% loss in 2018 that the bank blamed on the explosion of volatility during Q4, according to Bloomberg.


Q4 earnings season is still in its early days, but already every major bank has blamed trading-unit losses on Q4 volatility, and SocGen isn't an exception. BBG reported that the bank shuttered its prop unit's Hong Kong trading desk late last year as losses force it to abandon several trading strategies (BTFD?).


The bank has already revealed a 10% drop in revenue for its market unit that it attributed to activity in Q4.

French regulators allowed prop trading to continue after the crisis – while the Volcker rule effectively banned the practice in the US – but prop trading units must now follow more strict controls on capital requirements and costs, among other factors.

To be sure, this isn't the first time the bank has placed its prop trading unit under review.

Descartes, named for the 17th-century French philosopher, had 4.1 billion euros ($4.7 billion) of assets at the end of 2017, according to filings. The unit had 377 million euros of capital, equal to about 4.5 percent of SocGen’s funds for global-markets and investor services activities, the filings show.

Executives at SocGen have reviewed the performance of Descartes several times since its creation. The unit, which has staff in Paris and London, has made less than 1 million euros in accumulated profits between 2015 and 2017, according to filings.

The losses at the Descartes unit will likely make life even more difficult for SocGen CEO Frederic Oudea after the bank paid some $2.6 billion in fines last year

The issues at Descartes compound the problems facing SocGen…
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John Bogle’s Bombshell Gift to Americans

Courtesy of Pam Martens

John Bogle, Founder of the Vanguard Group

John Bogle, Founder of the Vanguard Group

The legendary John Bogle passed away yesterday in Bryn Mawr, Pennsylvania. He was 89. Bogle was the founder of Vanguard Group. In announcing his death, Vanguard said that Bogle “introduced the first index mutual fund for investors and, in the face of skeptics, stood behind the concept until it gained widespread acceptance; and he drove down costs across the mutual fund industry by ceaselessly campaigning in the interests of investors.”

We’ll always remember Bogle for the courage he demonstrated on April 23, 2013 when he appeared on the PBS program Frontline. Bogle dropped the bombshell that Wall Street has attempted to hide for half a century: If you work for 50 years and receive the typical long-term return of 7 percent on your 401(k) plan and your fees are 2 percent, almost two-thirds of your account will go to Wall Street.

Bogle explained the math to Frontline’s Martin Smith:

Bogle: What happens in the fund business is the magic of compound returns is overwhelmed by the tyranny of compounding costs. It’s a mathematical fact. There’s no getting around it. The fact that we don’t look at it— too bad for us.

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Whitney Tilson Wants You To Know He Might Not Be The Best HFM But His Finger Grip Is 95 Percentile

By Jacob Wolinsky. Originally published at ValueWalk.

Whitney Tilson’s email discussing his plans to climb El Cap and training his grip strength.

With my plans to climb the Nose of El Cap later this year, I’m starting to train for it: I joined a rock gym (Steep Rock Bouldering) a few blocks from my house and try to stop by for a half hour o...

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Zero Hedge

UMich Confidence Collapses As "Hope" Crashes Most Since 2012

Courtesy of ZeroHedge. View original post here.

Echoing Bloomberg's sentiment indicator, University of Michigan's survey shows Americans' confidence collapsed heading into January with 'expectations' plunging to Oct 2016 lows.

The University of Michigan’s preliminary January sentiment index fell to 90.7 from the prior month, missing all estimates in a Bloomberg survey of economists. The measures of current conditionsand expectations both declined to the lowest since President Donald Trump's election in 2016.


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Kimble Charting Solutions

Stock declines did not break 9-year support, says Joe Friday

Courtesy of Chris Kimble.

We often hear “Stocks take an escalator up and an elevator down!” No doubt stocks did experience a swift decline from the September highs to the Christmas eve lows. Looks like the “elevator” part of the phrase came true as 2018 was coming to an end.

The first part of the “stocks take an escalator up” seems to still be in play as well despite the swift decline of late.

Joe Friday Just The Facts Ma’am- All of these indices hit long-term rising support on Christmas Eve at each (1), where support held and rallies have followed.

If you find long-term perspectives helpf...

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Phil's Favorites

Transparency and privacy: Empowering people through blockchain


Transparency and privacy: Empowering people through blockchain

Blockchain technologies can empower people by allowing them more control over their user data. Shutterstock

Courtesy of Ajay Kumar Shrestha, University of Saskatchewan

Blockchain has already proven its huge influence on the financial world with its first application in the form of cryptocurrencies such as Bitcoin. It might not be long before its impact is felt everywhere.

Blockchain is a secure chain of digital records that exist on multiple computers simultaneously so no record can be erased or falsified. The...

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Digital Currencies

Transparency and privacy: Empowering people through blockchain


Transparency and privacy: Empowering people through blockchain

Blockchain technologies can empower people by allowing them more control over their user data. Shutterstock

Courtesy of Ajay Kumar Shrestha, University of Saskatchewan

Blockchain has already proven its huge influence on the financial world with its first application in the form of cryptocurrencies such as Bitcoin. It might not be long before its impact is felt everywhere.

Blockchain is a secure chain of digital records that exist on multiple computers simultaneously so no record can be erased or falsified. The...

more from Bitcoin

Insider Scoop Explores Strategic Alternatives, Analyst Sees Possible Sale Price Around $30 Per Share

Courtesy of Benzinga.

Related 44 Biggest Movers From Yesterday 38 Stocks Moving In Wednesday's Mid-Day Session ... more from Insider

Chart School

Weekly Market Recap Jan 13, 2019

Courtesy of Blain.

In last week’s recap we asked:  “Has the Fed solved all the market’s problems in 1 speech?”

Thus far the market says yes!  As Guns n Roses preached – all we need is a little “patience”.  Four up days followed by a nominal down day Friday had the market following it’s normal pattern the past nearly 30 years – jumping whenever the Federal Reserve hints (or essentially says outright) it is here for the markets.   And in case you missed it the prior Friday, Chairman Powell came back out Thursday to reiterate the news – so…so… so… patient!

Fed Chairman Jerome Powell reinforced that message Thursday during a discussion at the Economic Club of Washington where he said that the central bank will be “fle...

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Members' Corner

Why Trump Can't Learn


Bill Eddy (lawyer, therapist, author) predicted Trump's chaotic presidency based on his high-conflict personality, which was evident years ago. This post, written in 2017, references a prescient article Bill wrote before Trump even became president, 5 Reasons Trump Can’t Learn. ~ Ilene 

Why Trump Can’t Learn

Donald Trump by Gage Skidmore (...

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Opening Pandora's Box: Gene editing and its consequences

Reminder: We are available to chat with Members, comments are found below each post.


Opening Pandora's Box: Gene editing and its consequences

Bacteriophage viruses infecting bacterial cells , Bacterial viruses. from

Courtesy of John Bergeron, McGill University

Today, the scientific community is aghast at the prospect of gene editing to create “designer” humans. Gene editing may be of greater consequence than climate change, or even the consequences of unleashing the energy of the atom.


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Mapping The Market

Trump: "I Won't Be Here" When It Blows Up

By Jean-Luc

Maybe we should simply try him for treason right now:

Trump on Coming Debt Crisis: ‘I Won’t Be Here’ When It Blows Up

The president thinks the balancing of the nation’s books is going to, ultimately, be a future president’s problem.

By Asawin Suebsaeng and Lachlan Markay, Daily Beast

The friction came to a head in early 2017 when senior officials offered Trump charts and graphics laying out the numbers and showing a “hockey stick” spike in the nationa...

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Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.


This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...

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Free eBook - "My Top Strategies for 2017"



Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:


·       How 2017 Will Affect Oil, the US Dollar and the European Union


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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

Learn more About Phil >>

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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

Market Shadows >>