Facebook Rides Out the Storm … And Remains Stronger Than Ever

Facebook Rides Out the Storm … And Remains Stronger Than Ever

It was only a couple of weeks ago that Facebook was facing a Congressional inquiry over alleged misuse of member data … over 2 billion people use Facebook worldwide, with over 200 million in the US alone.  The misuse was described as a data breach at Facebook involving a hacking scheme from a company called Cambridge Analytica, who used false pretense to gain control over user profiles of voters here in the US.  It is unclear if what Cambridge Analytica did was illegal, since Facebook profiles are mostly public, creating the question – how was anyone’s privacy compromised?  In most cases, YOU grant Facebook the right to have your data.

In another time, such political scrutiny would negatively impact a company’s stock.  The stock did move into the red the day of and after the hearings, but only from 167 to 163.  By April 15th, it was back up to 168.  After it’s earnings report on Wednesday April 25th, the stock was soaring at 172 with no cap on how high it could go!  Campaigns such as #deletefacebook and the very bad public relations the company has endured has had little to no impact on its value and continued success.

Facebook is a major point of connection for most of the country’s population, and it has little competition in the marketplace, giving it a virtual monopoly on social media.  So which way does Facebook stock, and in turn, the social media investing world, look to go after this major brush-up on privacy related data?

I. What are the reasons to buy the trend on Facebook?

1)            Revenue is UP!  Revenue reports from the first quarter beat estimates by almost a half-billion dollars.  Analysts were taken by surprise.

2)            Earnings are UP!  The quarterly earnings report had earnings at 23% higher than the analysts estimated.  It was an unprecedented surge.

3)            Member usage is UP!  Despite the horrific data sharing, or stealing based upon your point of view, of the Cambridge Analytica scandal, you would have expected to see a slump in overall member usage of the site.  Instead, usage is up 48% year over year!  The privacy scandal made no dent in the public’s overall usage and engagement with the social media giant.

II. What are the reasons NOT to buy the trend on Facebook?

1)            Government regulation appears to be on the way.   Massive privacy breach … societal concern … operating as a monopoly … there is a growing consensus that large social media and tech companies (such as Google) that deal specifically with the internet can no longer be trusted with big data and acting for the public benefit.  While private companies, they also are clearly monopolistic in their industries – specifically Facebook.  These mounting problems and concerns seem to have jolted government officials, and it appears inevitable that regulation is heading Facebook’s way.

2)            Costs are escalating.  Lost amidst the euphoria of the unrelenting financial success Facebook reported this week was some book-keeping that is cause for concern.  David Williams of Williams Capital Advisors remarked on CNBC this week that you can see additional capital expense on data protection and legal fees as rising in the last quarter, and appear to be continuing into the 2nd quarter of 2018.

3)            Consumer trust has been compromised.  The currency of social media companies is consumer trust … trust in the experience, trust in the safety of their information.  The Cambridge Analytica scandal (or non-scandal:  to repeat, Facebook info on its users is mostly public, and they gave away the same data to the Obama Campaign for free in 2012) has brought to light, and the Congressional hearings focused on, a serious breach in the trust between the public, its members and Facebook.   How that will improve over time remains to be seen.

Facebook was and is the industry standard in this new age of social connection.  It has a virtual monopoly and dominates its industry.  But there are risks moving forward to a company that has so much power over the information we consume.  It is riding high for now, but like all investments, nothing stays up forever.

Call now to avoid the market roller coaster and invest in safe, simple, protected principal products, with a reasonable rate of return! 877-912-1919

Star Wars? Star Trek? No – Future Tech … The Sci-Fi Race We Need to Win

Star Wars? Star Trek? No – Future Tech … The Sci-Fi Race We Need to Win

Despite geopolitical conflict abroad, and the right/left political turmoil at home, we live in an amazing time to be alive.  The advances in technology making our lives easier and the world better are growing at an exponential rate each day.

This technology can have a positive or negative impact based upon their use.  Video games morphing into virtual reality can affect our children greatly – but adults control the on and off switch.  Media giants can make shopping, retail interaction, and access to information easier and more efficient, but they can also be used to spy on us.  Much of the advances in our daily lives over the centuries have had a profound impact … the “Industrial Revolution” changed our way of life through automation, the use of steel, electricity, and the advancement of our standard of living. The “Information Age” did much of the same – the microchip helped businesses become more efficient, and households could automate their own lives with the personal computer.

The jury is still out, however, on the new era that we are living in.  The TechCrunch blog calls it the “Experience Age”. Everything is being “experienced” through touch screens, virtual reality, and network connectivity.  While the standard of living leap-frogged through the Industrial and Information Revolutions, you can’t really eat, house, or clothe yourself with the Facebook app.  Will society benefit through the next wave of technological advances?

Regardless of their application to do good or evil, tech will continue to advance.

This week we are looking at the top 5 areas of Future Tech inventions the US needs to win to ensure the benefits to our standard of living, and the American way of life.

Top 5 Future Tech Inventions America Must Develop and Bring to Market Before Anyone Else:

5. Driverless trucks. Before the market is flooded with driverless cars, and the public begins to get used to the idea, prepare for the road-ways to be filled with driverless trucks.  It will be cheaper and more cost effective for companies who need delivery systems and logistics to deliver product to market using the driverless vehicle.  Truck drivers may be going the way of the blacksmith in short order.  The Japanese lead on the technology development but the US is catching up.

4. Space Drones. NASA has initiated contracts with private designers to develop space drones that can operate in a zero-g environment.  From satellite repair to satellite delivery, the commercial applications would be enormous.  The Pentagon will take a keen interest as well.  America does not appear to have commercial competition in this field, but Russia and China have invested heavily in high altitude and satellite warfare.

3. Artificial Intelligence. Facebook constructed two robots and tested the design by allowing them to communicate with one another using a computer code that somewhat resembled the English language.  The two were asked to trade and barter over several items – a hat, some books, and some clothing. Instead, they developed their own language in a matter of minutes and began speaking with one another in a language no one else understood!  The worst nightmares of a Battlestar Galactica episode???  The Japanese have advanced artificial intelligence programs, and thankfully, remain an ally.  China is not far behind.  The US was the leader in the development of AI and enjoyed wide dominance in this field … until the last few years.

2. Passcodes based upon brain waves. Access to your computer, entry to a home, being able to start a car … all and more could use the patterns found in brain waves.  Scientists at Binghamton University in New York have developed “neuro-scanners” that can identify people’s brain waves with a simple scan of the forehead … scariest parts of the Bible anyone?

1. 5G Technology. 5G is listed number one for a reason.  We are currently number three in 5G development, behind South Korea and China.  America’s invention, leadership, and domination of 3rd and 4th generation wireless networks in the last decade added over 4 million jobs and $400+ billion to our GDP.  This new advancement in wireless uses hundreds of microsites to relay data, and digital content transfers at speeds 100 times that of 4G technology.  4G tech uses old school cell towers, sending data up to satellites and then relaying them to your digital device.  Despite the advancement of the technology thanks to US leadership, foreign governments, specifically China, do not have regulatory obstacles preventing the construction of 5G microsites.  In other words, big government, again, is hindering US leadership in the field.  With significant zoning and legal delays that stand in the way of the construction of these immersive “hot spots”, US investors so far have been unwilling in many cases to fund an unknown return on their investment.  Communist China has no such obstacles.

5G represents everything in the digital future:  from “…immersive virtual reality platforms, sophisticated health applications, Smart Cities, Internet of Things (IoT) technology.…”  and much more.  The first country to the 5G finish line will add over $1.5 trillion to overall GDP. Some estimates have the job numbers at over 3 million.  More importantly, the ability to control the battle space will belong to who controls 5G tech, it is imperative the United States prioritize the development and application of this technology.

Future tech is not really in the future – it is here NOW!  And whoever comes up with the next generation of technological innovations – and successfully brings them to market – will dominate the commercial space for decades to come.  In terms of national security, the stakes are even that much higher.

Money and markets are affected by technological advances, and they can and will drive significant volatility.  To maintain a steady growth of your retirement money that is safe, simple, and generates a reasonable rate of return, call now! (877) 912-1919

Syrian Gas Attack: Options for President Trump

Syrian Gas Attack: Options for President Trump

There has been another gas attack in Syria.

After responding with 59 tomahawks on a Syrian air base last year, the US remained largely mute as other reported attacks occurred over the last 12 months.  But the size and scale of the most recent attack, and the photos of dead children, foaming at the mouth, have gone viral, President Trump seems poised to respond.

The battlefield is different and more dangerous this time.  The President has threatened a missile barrage on Syria despite the embedding of Russian forces throughout government-controlled areas.   His tweet reads as follows:

Syrian Gas Attack: Options for President Trump

American soldiers have already engaged Russian irregulars and easily won the battle, slaughtering the Russians and their Syrian government allies.  No doubt Putin will be looking for revenge.  The Syrian quagmire runs deep, and there are no easy answers for US policy.

Geo-political events can affect your money.  It may not be today, it may not be tomorrow, but markets are affected by changes on the ground in countries throughout the world.  You would have expected the Syrian Civil War, which started 7 years ago in March 2011, to have affected trade routes in the Mediterranean, oil prices, and even the price of US treasuries, as it would be assumed that debt would increase as the US funded stabilization efforts in the region.  Markets have shrugged off the carnage and devastation caused by that conflict.

Or have they?

It is easy to look at the stock market and say “no way” it could be higher … but isn’t that what we said at Dow 15,000 … Dow 20,000?  Transportation and insurance costs have already been steadily going up for global logistics companies which traverse the Mediterranean and run through Europe.  What about the human cost – was the next great scientist or engineer killed in the Syrian conflict?  How much of the human capital was destroyed and lost on the ground during this war … or that will be lost in the near future?

With the staggering levels of human suffering and loss, and potential damage to the marketplace in and around the Middle East, the price has been heavy from the Syrian Civil War.

The most recent chemical weapons attack – weapons that Syria was supposed to have given up according to the Obama Administration – certainly puts President Trump in the difficult position of deciding what will the American response be … there are not a lot of good options:

I. 3 reasons Trump should NOT strike Syria in response to their use of chemical weapons:

  1. War is over … our side lost. It is hard to over-state the calamity and abject disaster that has been left for Trump.  A red line around the use of chemical weapons was drawn, and we did not enforce it.  The Russians, seeing our unwillingness to keep our word, returned to the Middle East for the first time since we moved them out 45 years ago.  The order of magnitude in the size and scope of this crisis is simply of a scale we have never seen: (A) We had excluded Russia from the region since 1973.  They are now the dominant power in the region; (B) Iran is on the Golan Heights overlooking Israel, our ally;  (C) Saudi Arabia has launched wars in the region, a Sunni/Shia Civil War launched because they do not believe America will protect them; (D) Turkey – a NATO treaty partner – is actively working against our Kurdish allies and WITH the Russians against our interests; (E) Russia controls the airspace over Syria;  (F) American credibility is non-existent, and worse, considered a joke … most Americans will say “so what, not our problem anymore….”  But a Sunni/Shia war, an Iranian war on Israel sponsored by Russia … these are basically the worst parts of the Bible happening right now.  But still, many share the opinion that this war is over … better to save American lives and treasure and stay out.
  2. Picking a fight with Russia. Head to head, Americans always win.  Politicians involved???  That’s when our guys face their biggest obstacle.  An escalation on the ground which puts US forces in a combat zone shooting at Russians is what could be waiting for us, now that we have ceded Syria, and the larger Middle East, to the Russians.  Rebuild at home, rebuild the military.  Get ready to fight for another day, not a fight today in the Middle East.
  3. Israel can handle it … they already have. Israel has been waging a quiet war with Iran in Syria on their own for the last 5 years.  After the most recent chemical attack, Israeli warplanes launched a barrage of missiles against the airbase where the chemical weapons originated.  Israel has the technology, and the capability, to handle the western response. So, let’s let them.

II. 3 Reasons Trump SHOULD strike Syria in response to their use of chemical weapons:

  1. Keep Russia, Iran on notice….and more importantly – North Korea. The United States should respond for a myriad of reasons, not the least of which is ensuring Russia and Iran are on notice that we will not allow human rights abuses and violations of the chemical weapons ban treaty to occur in this conflict.  The biggest message is to send to North Korea, who is watching intently on the nature and timing of our response.  It would be preferred it is was not just lobbing a few cruise missiles at a runway, but a more robust and consequential campaign against the Assad regime.
  2. Support our allies in the region. Israel is alone, and its enemies are circling the embattled Jewish state.  Make no mistake, the previous administration ceded the Middle East to Russia and Iran, and our allies are without question in danger.  The US withdrawal from Iraq, and incompetence in Syria, has bolstered enemies of America.  A strong response is needed to reassure our friends, which is not just Israel, but also Sunni Saudi Arabia, Jordan, Egypt, and the Christians and ethnic minorities in Iraq and elsewhere.
  3. It is the moral thing to do. America’s role as the “Shining City on the Hill” sort of requires us to act.  One of our great qualities as a people is a foreign policy informed and ordered along moral grounds.  While we do not wish to go abroad seeking monsters to destroy, we have always stood up for and protected those who were in need.  While that moral strength has been challenged in recent years, our failure to act when a country uses chemical weapons is a dangerous precedent to set.  We are paying a steep price, and the people in the region are paying an even steeper price, for that lack of a timely response.

The United States remains the last, best hope for mankind.  We are the only country capable of protecting our allies and enforcing the global chemical weapons ban.  Assad and Syria have lied about destroying their stockpiles, and innocent civilians have suffered a grisly fate.  America’s enemies will continue to take ground if we do not stand firm.  And in this case, it is an easier decision to strike back – it is the just and moral thing to do.