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

Obama Policies: Trump Still Needs to Fix

Obama Policies: Trump Still Needs to Fix

The Obama Era of massive government regulation and high taxes was supposed to be reversed with the election of Donald Trump.  While President Trump has changed many of the business-stifling policies from the previous Administration, there still remains much to be done.

Many of the Trump campaign promises remain unfulfilled, but they were going to require Congressional action anyways.  The most prominent of these was Obamacare, which Congress failed to repeal after 7 years of promises (since the election of 2010).  But there are several campaign promises coming true, such as the cancellation of the US participation in the Paris Climate Accord.

Let’s take a look at the major policies from the previous Administration that have been undone, as well as those that remain in place:

I. Obama-era policies that have been reversed by the Trump Administration:

  1. Withdrawal from Paris Climate Accord. While climate change alarmists screamed to the high-heavens, Trump’s withdrawal from this global accord was the correct move on many fronts:  (A) it required the US taxpayer to transfer billions to third world countries to help with climate mitigation;  (B) it exempted China – the world’s worst carbon emitter – for decades;  and, (C) it was in form and content a “treaty,” which requires the Senate to advise and consent to the treaty … which Obama did not do.  So, for every legal and practical reason possible, withdrawal was the only legal and moral decision to make.
  2. Withdrawal from the Trans-Pacific Partnership. Keeping his promises to workers throughout the rust belt, who rightly feel that the establishment sold out their jobs and their futures to foreign trade deals, Trump issued an Executive Order withdrawing the US from the Trans-Pacific Partnership (TIPP) negotiations.  This was not as controversial as the Climate Accord since many Democrats opposed TIPP as well.  Conservative foreign policy hawks were and are concerned that we are not thinking about the broader global competition with China, and the need to counter economic alliances the Chinese are forming throughout the globe.  But for Trump, this was a non-starter:  we hold all the cards, so let’s deal from a position of strength.
  3. Net Neutrality reversed. Nice, fair sounding name, which confused much of the public.  However, “Net Neutrality” was an Obama policy to police the internet using 19th and early 20th century utility laws.  The internet, which had functioned without government interference since its launch in the early ‘90’s, was suddenly under the command of the US government using laws that were drafted to manage the railroads.  Obviously, the Trump appointment to the Federal Communications Commission cast the deciding vote to reverse this woeful decision to regulate what did not need regulating.

There have been many other reversals which have lessened the load on the taxpayer and removed the intrusive government intervention into the lives of small business owners, the tax payer, and the marketplace.

There also remains several important policy areas where the public is, and was, expecting action:

II. Obama-era policies that remain intact and that have yet to be reversed by the Trump Administration:

  1. Obamacare. The largest singular undertaking to socialize the US healthcare industry … and to do so in the worst way – high taxes, zero choices, mandated participation … remains intact.  Republicans had promised since 2010 that given the opportunity they would repeal Obamacare.  Trump agreed, and remains waiting for a bill to sign.  But once given both the House and the Senate, combined with Trump in the White House, a few Republicans in name only (RINO’s) in the Senate changed their mind, and did not vote for repeal.  Still, Trump has been successful at chipping away at the law – the individual mandate, the contraceptive mandate, and the court-ruled illegal payments to insurance companies have all been eliminated.
  2. DACA and Sanctuary-Fugitive Cities. Much has been made of Trump’s deportation efforts through ICE raids throughout the country.  Despite the uptick in deportations, and a limited decline in illegals attempting to cross the border, the southern border remains porous and illegals remain domiciled at unheard of numbers here in the US.  DACA was rescinded by executive order, but so far, Trump has not begun a deportation process for the so-called dreamers.  The lawlessness of sanctuary cities remain – threatening the safety and security of all Americans, and the secessionist acts of the loony-leftists in California is a daily headline.   A great deal more would need to be done to even put a dent in our “open borders” policies from the Obama era.
  3. Iran deal remains intact, for now.  Trump decertified the Iran Nuclear deal in October of 2017, but we still remain a signatory and have not moved to withdraw from it….at least not yet.  In January the Administration announced new sanctions on several Iranian entities and of all the Obama-era policies not yet reversed, this seems to be the most likely to be done so sooner rather than later.  Whether one agrees with Trump or not, the Joint Comprehensive Plan of Action (JCPOA) has been a disaster for America.  Another Obama era “agreement” not submitted to the Senate for ratification, much of the turmoil in the Middle East was directly related to Obama’s negotiation of this agreement…..the chaos in Syria, the return and empowerment of Russia, Iranian military supplies easily transported to Hezbollah to threaten Israel, the loss of Iraq completely to Iran, $1.5 billion of frozen Iranian assets here in the US that was sent back to Iran … you could not have made this up in a movie and anyone believed you.  Having said that, Trump’s rhetoric suggests that despite not having been reversed yet, it is only a matter of time before it will be.

There is much that remains to be done of the Trump agenda, and it will be heavy-lifting given the president’s level of distraction.  But he is off to a good start, and the country needs him to succeed.