How to Deal with Unpredictable News in the Stock Market

– What’s up? Tim Sykes, millionaire, mentor,
and trader here in Tulum. Look at how beautifUl this is except that it’s freaking pouring out. Can they see that it’s pouring? – (Cameraman) Yeah. – They can see this? – (Cameraman) Pretty sure. – All of our friends are
going down to the beach. We can hear them screaming and squealing like little children. Leave a comment underneath. Would you stay inside during a rainstorm or would you go out into the
wild Mexican unknown beaches for possible death but also possible fun? (rain pouring) I don’t know which is gonna happen here. It’s gonna be interesting either way. I have a feeling they’re
gonna come back up in about five to 15 seconds
’cause it is pouring. But we’re also in this tropical
area so it’s kinda nice. I wanted to film this video specifically because I wanted to show
you that you can plan, you can be as rich as possible in an area, you can do everything right and yet something can still go wrong. Mother Nature, for example, in this case. I was gonna film this happy video, look how beautiful this is. Obviously that’s not happening here. So you gotta be careful a little bit but understand that’s what make life, that’s what makes stock
trading so much fun. It’s unpredictable, okay? You can’t control everything. It doesn’t matter how much money you make, it doesn’t matter what you do, how much planning you have, sometimes stuff is just
gonna happen, okay? And they’re having fun out there. I’m not going out there,
I have a sore throat, I don’t wanna get any sicker. We’re visiting 10 of my libraries
with my charity tomorrow and I just want this to be
kind of a visual reminder, (bleep) is gonna happen to you, okay? Whether you’re in a trade
and it’s not going well and for whatever reason, your website, your broker shuts down and you can’t exit. Sometimes you’re in a trade,
unpredictable news happens and the stock starts going the other way. Don’t blame yourself, okay? I get a lot of discouraged
students where they lose money, they make a mistake, and
they can’t get over it. And what you have to understand
is that (bleep) happens. But I want you to see that
this is gonna happen to you and you can’t be discouraged, you just have to get over
it the best that you can. I wish that I wasn’t stuffy right now. I wish that I didn’t have a sore throat. I wish I could go out there
in the water and have fun too but guess what? I’ve been working too hard,
burning the candle at both ends, you know, I just came from Art Basel, raised a bunch of money
with Mat’s art show. The prints go to the Karmagawa
Foundation, my charity. So I have no good news for you, okay? I just wanted to get on
camera and say this happened. I was gonna say like, “I
didn’t make money today,” but that’s a lie, I actually
made like 600 bucks. Just gave a webinar, the
Wi-Fi actually worked, so I think the lesson here
is when bad stuff happens, when stuff that you can’t control happens, look to the bright side. I know this isn’t the most technical video but it’s still useful, okay? My job is to try to teach you, try to get you having the right mindset. I hate seeing discouraged students where you lose money or you make a mistake and you stop studying. And you punish yourself. Like, don’t punish yourself
when you make a mistake. That should encourage
you even more, right? Like, I have some students
who break my rule number one about cutting losses quickly. If you break that rule and
you don’t cut losses quickly and you have a big loss, that
shouldn’t discourage you. That should be like, oh,
this is a wake up call. Let me actually follow
Tim’s rules next time so I don’t have that big loss. What you have to understand
is that life is a marathon, trading is a marathon,
getting rich is a marathon. There are no quick answers
and if you do happen to have something that happens too quick, like a lot of these like
athletes or child TV stars, they get screwed up in their heads because they don’t really
appreciate the journey that it should have taken to get there. Or trust fund babies, right? Like, they have all this
money, they have no idea. For Karmagawa, I’m very
fortunate with my partner Mat who’s a great designer and
he has connections galore and we just created this
new charity apparel in Japan and we just had an opening at like the number one store
in Japan which thousands of other real, like, you
know, merchandise companies. Like, you know, we’re a
charity merchandise company, like we still make good merch
but that’s not our main focus. But like there are thousands
of hardcore designers who are working nonstop, trying to get their clothes into any store and we just leapfrogged all over them and we’re in the number one store and I felt like a trust fund baby, ’cause I didn’t really earn it, but I just picked a good partner in Mat. So long story short, you
gotta at the positives. Look for that journey. Get excited for the journey. Get excited when something goes wrong. That’s part of this all, okay? If everything goes perfectly, if everything’s just rosy
all the time, that’s boring. You’re not gonna appreciate it. There’s a great quote from
the movie “Vanilla Sky” and it’s probably from somewhere else too but I watch a lot of movies. “The sweet isn’t as
sweet without the sour.” So I, once upon a time,
had a $500,000 loss. You can read all about it and
my haters still bring it up. It was over a decade ago. I’ve made it back many times over but at the time, I was very depressed. I turned to drinking for several months. You know, I didn’t know
if I could get back up but then I got back to my main strategy where I had made millions
of dollars not investing where I had lost money and
I focus on rule number one. Back then, I didn’t even
have rule number one. I didn’t have risk management. So the loss, while it sucked,
it helped me define my rules. It helped mold me. So use these negative experiences, use your losses and mistakes, to help mold you to learn what not to do. This isn’t that bad of a mistake. I mean, it was just
raining for a little bit. It just kind of screwed up my video but I wanted to make a
video about that, okay? So many of you cry when you have a loss or you have a mistake. That’s part of everything. Use it, learn about it, remember it. Don’t just hide it, don’t
pretend it doesn’t happen. We all make mistakes. Stuff that we can’t plan
happens to all of us. It’s all about how you react to it and keep moving on and overcoming it and then when you eventually find success, you’re grateful for those
mistakes and those losses and those setbacks and
obstacles along the way. That’s today’s lesson. Leave a comment underneath, again, whether you would go
outside in a rainstorm in a tropical area like this or would you sit inside like
a Jew with a sinus infection? You tell me. Hey, Tim Sykes, millionaire,
mentor, and trader. Thank you for watching my videos. I hope that they help you. I want to share everything that
I’ve learned over the years. You can check out more
videos right over there and also click Subscribe so that you can watch all of these videos, get that knowledge, and become
my next millionaire student.

Why The U.S. Government Pays Lockheed Martin Billions

Lockheed Martin is the top grossing defense
firm in the world, and the U.S. government supports that business to
the tune of over $37.7 billion. It surpasses its closest
competitors, Boeing and Raytheon, by nearly $20 billion in arms sales. These funds are granted by Congress
to provide equipment that enables the U.S. military to protect the
country at home and abroad. So why is Lockheed the
defense darling of the U.S. government? And how did it
beat out its competitors? One of the top priorities of
all administrations is the protection and safety of the American people. To ensure that, politicians work
with defense contractors to provide equipment to the military. This partnership provides a unique
opportunity for private corporations to execute the will of the government
and requires a delicate balance. President Eisenhower, in his farewell
address, coined the term military-industrial complex. And what he was talking about
was the close connection and collaboration between arms contractors
and uniformed military. In the councils of government, we
must guard against the acquisition of unwarranted influence, whether sought
or unsought, by the military-industrial complex. The political incentives of the U.S. Congress and the Department of Defense tended
to work together in a way that created enormous incentives
to increase military spending. For example, when there’s a major
weapons program like, say, the F-35, which is the current Air Force
combat aircraft, is being purchased, members of Congress might have questions
about this plane like is it performing well? Are we getting a good
deal for our money and so forth. They are reluctant to vote against it
because it means going up against potential jobs in their states. The Congress people in whose district
those companies are located and the Defense Department that then gets to
use the equipment that is purchased in this way. And Eisenhower believed
that that complex of the military, the industry and the government, the
Congress in particular, created a tendency for the United States
to overspend on national security. For most of the defense industry, their
biggest source of business is the Department of Defense. So they kind of
live and die with the defense budget as it increases, the revenue
increases, as it decreases, the revenue decreases. Waging an actual war is
a very expensive project. The 9/11 attacks in 2001 were a shock
to the American psyche, led to a substantial ramping up of U.S. military spending in the years after
2001, partly because of the immediate issue of terrorism and partly because
of the closely related but second order problems of the wars that
the counterterrorist program led to in Afghanistan and Iraq. The price tag gets huge. And so American defense spending has
grown radically since 2001 and remains very high. And Lockheed Martin is the
top-contracted company by the U.S. government. In 2018 alone,
the company sold $37.7 billion worth of contracts
to the U.S. government, making up 70%
of their net sales. The other 28% came from foreign military
sales and 2% came from commercial and other customers. Lockheed’s total revenue in 2018
was about $53 billion. By contrast, Lockheed’s next biggest
competitor, Boeing, was awarded about $23 billion from government
contracts the same year. So even though Boeing is a much
larger company with $101 billion in total revenue in 2018, only a small portion
of its business relies on defense contracts. Boeing might be a prominent example
where they do get a lot of revenue from the commercial business falling,
in fact, it’s about two thirds of its revenue from commercial
aviation, about a third from its defense business. Boeing mostly makes
planes for commercial airlines, but it also has a robust business
making military aircraft and other weapons. The next largest
competitor is Raytheon. Raytheon is a prominent defense firm
that offers services in everything from cybersecurity to
missile defense. 68% of Raytheon’s net sales
came from the U.S. government in 2018, which
means about $18.4 billion. They list
their principal U.S. government customer as the U.S. Department of Defense, as
does Lockheed Martin. However, before Lockheed Martin got
this very crucial customer, it struggled to define its identity. Glenn L. Martin opened his aviation
company on August 16th, 1912. The company went on to become one
of the earliest suppliers of the U.S. military, making aircraft for both
the army and the navy. They went on from success to success
through the twenties and the thirties pioneering all sorts of new
aircrafts, but particularly military airplanes. In 1961, the
second Glenn L. Martin Company merged with
the American Marietta Corporation. It was renamed the
Martin Marietta Corporation. The same year, Glenn Martin
launched his aviation business, the Lockheed brothers launched their
aviation business, the Alco Hydro Aeroplane Company, which was later
named Lockheed Aircraft Company. Lockheed, L-o-u-g-h-e-a-d, is
pronounced like Lockheed. People had a hard time pronouncing it
that led to the brothers legally changing the spelling of
their surname to Lockheed. Malcolm went on to start a
successful car hydraulic brake company, and Alan resigned after the company
was bought by Detroit Aircraft Corporation. But the company didn’t last
long and fell into receivership under the Title Insurance and Trust
Company of Los Angeles, officially killing Lockheed Aircraft Corp., which was a subsidiary. Its assets were sold off to Robert
Gross and other investors who went on to form a new Lockheed
Aircraft Corporation of Delaware. Lockheed Aircraft Corporation changed its
name in 1977 to Lockheed Corporation to demonstrate they offer
other services besides aviation. Those two companies, the Martin
Marietta Corporation and Lockheed Corporation, were two prominent competitors
in the defense marketplace. However, that marketplace has never
been completely independent of the government’s actions, just as President
Eisenhower had warned when he spoke of the
military-industrial complex. Military procurement had declined around 52%
from 1985 to 1997 in current dollar terms. Before 2001,
many people believed that national security had become a lot easier with
the end of the Cold War and that the United States could take what
was referred to at the time, a peace dividend. The much larger defensive
efforts that the United States had made during the Cold War when
we had to fight Soviet Union weren’t necessary anymore when the Soviet Union
collapsed and the Cold War ended. So defense budgets tended to decline. Leadership at the Department of Defense
inferred that the defense industry would have to shrink around 40% in
order to save the industry from collapsing amid declining demand
from the department. Officials encouraged companies to consolidate in
an effort to save each other. At the end of the Cold
War, there were concerns about whether the Pentagon budget, which was going to come down
about 10 to 25 percent or so was projected in real terms. Could that smaller budget sustain
the same number of contractors? And William Perry, the secretary of
defense, in the administration felt the answer was no. In fact, in
1993, the government asked specifically for less competition among
defense contractors. Look to your left.
Look to your right. One of your companies is not going to
be here in a couple of years. And then you also had
the infamous Last Supper. We think there are too many companies
in this business and we want to merge and combine with one another at
reduced costs to us, overhead costs at the corporate level. Norm Augustine
kind of engineered the whole series of mergers. Infamously or famously, Norm Augustine
who at the time was the head of Martin Marietta was at the
table with a bunch of other industry haters. And he was one of
the most aggressive executives taking that guidance and running with it. And he became CEO of the
combined Lockheed Martin and also consolidated and purchased lot of other
companies. Lockheed Martin absorbed large companies like Ford Aerospace
and Loral Corporation. Basically the big winner and that
consolidation after the Last Supper was Lockheed Martin. It was after that
that Lockheed aircraft and Martin Mary had emerged. In 1958, Lockheed Martin
proposed to Northrop Grumman and the government actually told them
not to do that. They cancelled that transaction. They said they wouldn’t approve it
and the idea was dropped. So that was that’s kind of, if
you will, the sort of the generally accepted end of the the
Last Supper consolidation era. By 2000, the industry had consolidated
into the marketplace we know today with Lockheed on top. So the way
the industry is structured now, the barriers to enter are huge. Unless they
brought up some of the existing companies, you’re only going to have
a couple of competitors for most things you might want to
do. Lockheed Martin now stretches into four business segments:
Aeronautics, Missiles and Fire Control, Rotary and Mission
Systems and space. It’s a company that has combined with
other companies over time to gain its current market position as the
largest company in the world. In 2019, Raytheon and United Technologies
announced intention to merge to have a better edge
on the defense industry. To protect their profits, companies like
Lockheed Martin also sell their aircraft to American allies when
cleared by the State Department. When the defense budget in the U.S. started to fall, a lot of companies
really amped up their work to sell products overseas. So depending on the company, that’s probably
now like 25 to 30 percent of their revenue may come
from international sales. That’s one way the government
controls the defense marketplace. Another way is through direct
negotiations with industry CEOs. In the 2017 fiscal year, the
then president, Barack Obama, proposed a budget of $582.7 billion for the
Department of Defense. The following year in 2018, President
Trump proposed a budget of $639.1 billion. For the fiscal year 2019,Trump
proposed a budget of $716 billion for national security, with $686
billion for the Department of Defense. And looking to the future,
Trump proposed a budget of $750 billion with $718.3 billion going to the Department of
Defense for the fiscal year 2020. The company was well positioned in the
Obama years as well because, you know, he actually spent significant money
in this decade, which includes most of the Obama two terms. We’ve spent a trillion more on the
Pentagon than in the prior decade, which was at the peak of
the Iraq and Afghan wars. President Barack Obama appointed Lockheed
CEO Marillyn Hewson to the president’s export council in
September of 2013. Marillyn Hewson from Lockheed Martin. Obviously, one of our greatest innovators
and one of those innovations is the F-35 fighter jet. It is the most advanced
fighter in the world. It’s stealth. You cannot see it. Is that correct? That’s correct. Better be correct. Right? A single F-35
can cost over $80 million and the government hasn’t always been happy with
the F-35’s performance and price. Then President-elect Donald Trump thought
the F-35’s program delays and high costs were bad for business. This one from the president-elect based
on the tremendous cost and cost overruns of the Lockheed Martin F-35, I’ve
asked Boeing to price out a comparable F-18 Super Hornet. This caused Lockheed Martin shares to
fall around 2% and sent Boeing shares up 0.5%. In January 2017, Trump commented on
the tension of his negotiation with Lockheed Martin. Look at
what’s happening with Lockheed. Number one, we’re cutting the price of
their planes by a lot, but they’re also expanding. And that’s going
to be a good thing. Ultimately, they’re going to
be better off. Hewson is actually in this very
interesting sweet spot where the defense budgets never been bigger
under any presidency. So that gives her company a lot of
leeway to snatch up a lot of those contracts. I don’t see any realistic
chance that there’s another company that’s going to exceed Lockheed Martin
in the next five years. Lockheed Martin will be delivering 478
F-35 aircraft to the U.S. government under their biggest deal yet,
a $34 billion contract with the Pentagon. In 2019, the U.S. government also approved the sale of 32
F-35 jets to Poland for around $6.5 billion so the company is poised
to be successful among allies as well. When you look at Lockheed’s diverse
portfolio and you pair that with a defense budget at a tune of
$700 billion, of course Lockheed is prime suited to pick up more government contracts
and to ride even more of a successful wave.

Technology Is Frothy Even With A Marijuana Sunrise | Greg Schnell | Market Buzz

* music * Welcome to the next decade of Market Buzz.
I’m Greg Schnell the, Canadian Technician and the host of this unique show. We look
for long time fair trades on weekly charts. Please follow me on twitter at
@schnellinvestor, go check out my website at, and hopefully
follow me on on StockCharts on the blog’s tab under your ChartWatchers,
Don’t Ignore this Chart and the Canadian Technician. So we still got ourselves a
bull market lots going on. I’ll be doing it a little bit of public speaking over
the next week so I just thought I’d let you know I am participating in the summit. There’s about 90 speakers for that one I think. I’ll be presenting
Tuesday morning at 9:00 a.m. it’s totally free and I don’t know if you can
see this on my screen but it’s
and you can click on there and and find my name and register or just register
for the whole conference whatever you’d prefer. Anyway should be a great one lots
of good speakers there lots of ideas and it’s all free. And as well I’ll be on
that afternoon and I’ll be on with David Keller on The Final Bar and that will be
a 4:00 p.m. Eastern so just as the market closes that one’s kind of funny
because I used to do The Final Bar that used to be this you know I had at the
end of the day, so anyway it’ll be nice to be back. Should be exciting so looking
forward to that. And our agenda today is the technology XLK and XLC those two
groups, I know ones communications, are they
unstoppable and then we got a bounce in marijuana names today or or somebody
just lit up in marijuana and finally we got some something more than a spark.
So we’re gonna go through some of the marijuana names and just check them out.
I don’t think, don’t think you’ll be missing any rally by any stretch but if
you’re a trader that might be a place to hide. Go look for something so if the
overall market rolls over maybe these MJ names can’t continue to run. So we’re
gonna look at the confusion on the trade deal, you know, it’s been
so quiet as to what’s actually in this trade deal and I know there’s a couple
hundred people gathering in Washington today to talk about the signing of the
trade deal. I think the real question I have is why aren’t the charts kind of
confirming that? So there was a pickup in in some of the industrial names last
week some of the industrial metals but the industrial metals chart hasn’t moved
a whole bunch yet so we got a whole bunch to try and shoot through. So let’s
do that, we’re gonna jump in to the overall market here. Let’s just hit the
refresh and make sure. I look, I learned something new this morning one of the
things that happens is on on the market movers over here this OGI is a
marijuana name and it was up 20-some percent to start the day and it’s now up
38 percent but it was on the most active list but not on the percent up list and
that I did not understand and I found out the reason for that and one is that
the percent up list the stock has to have a price of at least five bucks
where is the most active it has to have a price of at least a dollar.
So anyway, learned something new just there’s a little bit of a parameter
setting there that that can change it. But if you notice just looking on the
homepage today so this is Aurora Cannabis, this is OrganiGram, this is
Hexo which is also a marijuana name, this is Aphria which is marijuana name,
that’s a Canadian bank, but this is Canopy Growth Corporation so in the U.S.,
the ticker symbols CGC, Charlie-Golf-Charlie. And two oil
companies and then another marijuana name here
Cronos. So lots of marijuana on the most active list and you know finally
somewhat of a heartbeat. I mean these names have been really beaten down. So
we’re gonna cover that in a bit. I want to go back and just talk briefly about
the indexes because I think it’s it’s at a remarkable stage and so we’ll just
cover that off. So first of all I’ve been highlighting on the PPO
how high this is getting. So this is the the run for the last 10-days and it’s
you know Nasdaq was 86.50 to 90.75 so it is that four hundred
and some points in just a a week or so. Anyway so what we could see is this PPO
on the daily levels, I’ll put a pretty high level up around two percent but on
a weekly level we’re up, way up here over four percent now we’re exceeding that
January spike high in 2018 and this is taken on a whole new level of surgency.
So with that the real question would be you know who’s going to add more money
into those big names at the top here and so far the index trackers are doing a
fine job of that. But if we go, I’m gonna just flip over to my other, whoops, not
that one, this one my other look for these stocks and I’m
gonna put up the XLK and what I want to show you here, these are the
technology names and this PPO is over five percent and as you can see in 2018
on that sudden surge, we didn’t get anywhere near that high and now if I
just unwind the tape, whatever we can go 20-years, what we’ll see here is that you
know getting over 5% is a pretty rare beast and we’ll just put a horizontal
line on that, whoops, did something wrong for some reason that’s not opening okay
there we go and I just want to take and go horizontal line, on the wrong line so
nothing there, the horizontal line on this one and you put in 5.0%, 5.0 to 3%
just to show you that this and we’ll pick red or something. Okay and now what
you see here is this red line and so coming off the ’09 lows that
significant surge off the ’09 lows we got to this
level same thing in 03-04 and briefly in 2012 touch that level also. So usually
I mean we’re at a I’ll call it a pretty healthy run rate, so the real interesting
question is, is this normal? Are we at the new normal, where these
stocks can just levitate or or is this a little bit overdone. And so I would just
say make sure that you’re aware of how flamboyant or how enthusiastic the
market is. This probably isn’t a place to add new positions into already run up
names. Ah, XLC, what we see on this one this chart not nearly as bullish. So we
still have that 5% line but this is only sitting at around 3% and so with that 3%
level, I think what what the important message here is the the communication
sector may not have run as much but let’s face it it was a relatively new
sector. There’s still lots of good stocks performing over there, but I think the
important thing to be aware of is just how much these top five names have
started to drive the bus. Now if we look just let’s go pick the new percentage
names today and and what’s getting beat up
I guess toys weren’t a very big seller this Hasbro chart looks particularly
hazardous as it’s starting to break down. On the other side I just want to go back
to this ChartList, what did I do there, sorry wrong tab, what I want to point out
here is you know this is how many stocks are in negative territory today and they
just continue to surge and so with that sort of price action, I mean I don’t
think you want to fight the tape, but you sure want to be careful with it because
we we are so extended. Now you know when we look at the big five so here’s Apple
and obviously we know it’s and running on a bit ,it’s up another
percent today, let’s go find Netflix on here, search, and the point I want to make
on Netflix is that when we look at this chart one thing to be careful of here is
the PPO is right around zero and if this rolls over that’s a pretty hazardous
condition. So, well everything else has been relatively enthusiastic and the
chart is starting to improve in SCTR ranking I think just be aware of how
sensitive we are, and and maybe I should explain that a little bit more, so what
happens is when when momentum goes below zero we call that the winter position
and the big thing about that winter position is obviously when that’s
breaking down that’s a relatively large hurdle. We have so much negative, we have
so much momentum ,or weakening momentum that it’s actually pushing down below
zero and just in here that was a pretty important place to be aware of, back in
July, that was a pretty important place to be aware of. And now here we sit in
January just barely above zero and we’re gonna have Netflix report sometime over
the next couple of weeks probably and and when they report I think the thing
we want to be most in tune with is how sensitive we are here. If this rolls over
right away that’s probably gonna be a major signal for Netflix so try and and
be careful there. If we go look for Microsoft it just keeps going. It’s
almost crazy how much how these big companies have rallied but this one’s up
another 1.46 percent this week and you can see the PPO way up here at five or
six percent that that is very lofty. Now it can stay up there for a long time as
it did in 2018 and and then remember 2018 was a pretty choppy market, we made
a big high and then went sideways and then broke down hard in the fourth
quarter. Microsoft broke down a little bit in the
fourth quarter from 113 to 92 so that’s about 20%, maybe 15%, but I think the
bigger thing to keep in mind is this is really heavy up here on the right
inside and just be aware of of where we’re at. Amazon is a different one. What
we see with Amazon is the PPO is rated 0 also and so I would just use that same
cautionary situation and again, I would not want to short Amazon, it’s a beautiful
stock. I’m just saying that the momentum can be fairly tepid here and if it’s
rolling over at 0 that’s probably a good place to pay attention and make sure
that you don’t get caught offside. So as much as my confidences is soaring for
what the company’s going to be doing in on-time delivery and all that kind of
stuff, the one-day delivery with drones and and that whole build out, I think
that’s probably going to be a great company. And all the warehouses they’ve
been building have a reason and that’s just to get closer. So anyway, just
careful with Amazon. I do want to show Skyworks because I think this stock is
a beautiful example of 5G and it’s been running up very very nicely and the only
thing I will say is that the momentum is starting to wane here, and again, if I was
gonna pick a 5G stock ,this is probably one of the ones I would like to be in.
If you get a pullback to the ten week or something like that that might be a
better entry and that would also line up with prior highs, so pullback to support
and then take off again. Anyway, some of these names look a little frothy and if
you had the chance to take a little bit off the table that would be a good idea.
So we’re gonna take a quick break here we’ll be right back and when we get back
we’ll jump into the MJ names. * music * Okay, so one of the things that’s
happened is just in the last few days the marijuana names have started to
surge and that’s obviously a nice thing. But you need to be ready for that and so
one of the things I’ve done is I have all of these ChartLists created under
different groups and so when something happens I can jump in and I can just go
specifically to that group. So here’s biotech and pharma and then here’s China
stocks we could go look in there and just see how they’re doing since we have
the trade deals being signed today. We got cloud sector and coal industry and
copper mining, whatever it is that you want, cyber security but by breaking them
down into groups the most important thing is that when something happens and
you you want to see if that is happening across the group the easy way to do that
is to have it already set up. And so in this case I have the marijuana names all
set up and very quickly you want to sort them based on the strongest stocks. So
what I’ve got here is SCTR ranking set up for these and you can see that,
you know, we have a few stocks with a SCTR ranking above ten and even
Canopy Growth after it’s big move this week is still 9.1 so it’s
still pretty suppressed or depressed. I think when you start to look across
these there’s a couple that are more interesting charts and how do you build
these names. One of the things you can do is you can Google whatever top ten
marijuana names, or you can Google top ten marijuana REITs or top ten
marijuana growers, or you know, follow, go into some of the ETF’s.
Seed is an ETF that has marijuana stocks in it so you could go in and just check
what they own. That’s kind of how I do it and so I’ve built it over time. So, as an
example, one of my friends on Twitter the other day was talking about this IIPR
which is a real estate company, industrial real estate and I think I
think it builds warehouses for marijuana. So anyway he mentioned it as a marijuana
name so I just put it in my list, doesn’t mean I’m gonna trade it, but it’s in here.
So I have about a hundred stocks in here and most of them don’t have a SCTR
ranking because they’re relatively new. And so that gives us a problem when we
try to sort them because what we’re also trying to find out is if some of these
names could be improving, right, but I’m not really gonna trade a penny stock, a
$0.14 stock, or whatever, so I want to stay on something that’s got a little
bit higher growth. So what I’ve done is I started off clicking on the volume, then
clicked on the close, and then clicked on the SCTR ranking, and by doing that, so
if I click on volume, then click on the close now I’m gonna get the highest
price first and then get the SCTR ranking. What happens is when I don’t
have a SCTR ranking then it will default by price. And so that gives me a
method of making sure that at least I’m looking at the companies that are you
know are trading much better than than a penny stock or whatever. So when I create
that sort, you can scroll down to the very bottom and you’re gonna hit “number
in sorted order”, I’ve already done that so they’re already sitting in the sort
order of either price or SCTR ranking. So now we’re going to go back to the top
and and if you have any questions about that I’ve done a lot of videos on
SCTR ranking sorts, a lot of the Market Buzz shows are on there but every
now and then I’ll jump in and actually start again at the beginning. But what I want to do today is just go look through some of these names and
StockCharts was having a little bit of trouble with some charts loading this
morning so if we get some blanks, we might have to hit some refresh, but we’ll
see. So here’s marijuana companies inverse ETF. So this was going up when
the marijuana names were falling and this is the top-ranked SCTR in the
area or in the the industry group, and what you see here is it’s rolling over
pretty hard. And that might suggest to me finally this is the first time it’s gone
below zero on the PPO, so this probably looks like, at least if you wanted to
trade in a space, this might be the place to look. So here’s Corvus Pharmaceuticals
and there’s a couple of things I like on here so let’s just go and, okay annotates
turned off, so I have to fix one thing here and what we do on this annotation a
couple of things I like to keep track of is just what is the big trend in
momentum well we can clearly see this has been breaking so that’s a something I
like and again if we wanted to put that on price, whatever it would match in here
with this relatively short trend line something like that, or we’ve got a long
trend line that’s just broken in the last week or so. Anyway the bottom line is
it’s starting to break out and that makes it much better. We’re starting to
get new three-month highs on relative strength. All of these are good sort of
basic scan ideas before trying to find new leaders, this one’s at four-month
highs getting on to five-month highs. RSI is getting up around 60
we’d like to it to get all the way back up to 70 to kind of confirm it but,
anyway this this Corvus Pharmaceuticals looks like a pretty nice chart and what
I like about that is it it’s starting to you know take nice shape.Now you know $4
to $6 it was only $9 high, there’s lots of charts that have been beaten up much
more than that. Here’s Scotts, and this is just the
basic fertilizer company, and you can see it hasn’t really pulled back but it is
spring and so lots of things, you know, you could have people adding plantings
and all that kind of stuff, so Scotts fertilizer could could take off to the
upside here and it wouldn’t take much to break through PPOs giving a buy signal
starting to turn up higher. This name has been choppy for a couple of years, ePlus, and
what you see here is, you know, it has the sudden thrusts and then nothing for a
long period of time so maybe it’s about due for its sudden thrust. The only thing
I would just say is it’s so spiky both ways it’s not really something I want to
trade. Here’s that Innovative Industrial Properties Tom Bruni pointed it out.
What you see here is a big downtrend and it’s starting to turn up PPO is starting
to give you a buy signal. I like it that this is at least four to six months, that
helps me I don’t like how straight down this is but you can see that this has
been a pretty good performing REIT and all of a sudden it’s starting to improve
pays out a 3% yield not bad. GW Pharmaceuticals this one’s clearly
gapping up but notice this already it’s already been up 10 bucks and back this
week. Starting to get a buy signal down here and, don’t get me wrong I mentioned
it earlier, but there’s only a few stocks that even have a SCTR ranking worth
looking at and I like them when they get above 30, so something sitting at 14 is
pretty weak and this one’s even in the U.S. so it’s it’s really weak. And then
here is Fire and Flower Holdings starting to turn up and as this one
starts to pick up in strength here, I think one of the things that’s more
interesting is it’s breaking through, you know, kind of an 8-week area of support.
PPO’s trying to cross up so perhaps there’s something there
full stochastic has just gone above 20 so that’s a bit nicer. The difference
between this chart, this gray background or graphite ChartStyle, is weekly and
then daily if it shows up with this brown frame usually. So what you see here
is we’re hanging right around the 200-day moving average for this Cardiol
Therapeutics don’t have a clue what they do, they’re in my marijuana list that’s all
I know, and up sloping is just starting to break
and it’s rolling over a bit here. Doesn’t mean I’d own it or wouldn’t own it,
I’m just suggesting it’s in the group. I do like the fact it’s finally broken the
downtrend but it it I peeled roughly a year ago we’ll see if it can bounce off
this 200 area and start to accelerate higher. So Canopy Growth is the one
that’s been in the news all week and it’s it was one of the bigger names out
there and Constellation Brands had taken a position in it. And on this chart we
see a couple of things and I mentioned this in Don’t Ignore This Chart article
this morning, that’s sitting on the StockCharts website and what you see here is
the relative strength is starting to break down in this name so that’s, that
was a problem and it’s now turned up here we’re at 3-month highs so that’s
your first step on a a bullish look. The full stochastic broke out here early
December, late November and started to push up and that’s looking
nice and it’s broken above the last two months or three months so, all of a sudden
where we’re at three-month highs in price in the stock is coming off a
pretty big base here. This is when the CEO left and, I think it’s when they left,
and and now the stock is starting to migrate higher. In terms of the PPO there’s
still a big long down term trend line that hasn’t been broken but I do like
the fact that this six-month one from June to December is now breaking and
starting to turn up so at least you’ve got some change in the weekly momentum
enough to to get you interested all of these names and I mentioned it in the
article this morning was you’re still dealing with stocks that are just having
one good week so let’s not get too excited I like the fact that the whole
group is trying to move up that is much more encouraging. The one thing I would
say is set your stops and if you get hit just let them go because these things
they still haven’t made a lot of money. Aphria popped yesterday and then today
was down, or popped two days ago and then yesterday was down. Like this still very
volatile space but volatility gives you upside and downside.
So here’s Pyrus International. This stock was over 50 bucks had a big super surge
and everybody thought it was well on its way to whatever and October 2017 was
what we called weed Wednesday in Canada when marijuana was legalized, but this
thing took off to the moon and then has never been there since so from 52
dollars back to 8 or 9, you know, it’s finally above the 10-week moving average
so that looks good and we’re starting to break this year long down trend, so a
little bit of hope for that. Aphria this one big down sloping
trend line in price, trying to finally break through here, again topped around
weed Wednesday and a two-year 18-month pullback, starting to turn up again
finally that would be a nice thing to see.So if you’re interested this you
know some of these names are here but again they’re going to report earnings.
All of these, check when their earnings dates are because they’re gonna be extremely
volatile through earnings and I think right now we have a lot of grow ops that
could more than supply the legal demand in Canada and the U.S. so, so just be
careful because they’re still an underground economy competing. Here’s
CLIQ.TO and you can see this one is a downtrend line here if that was to start
to break that one to be bullish, trying to bounce off their lows of four bucks.
This was all the way up at, you know, ten or eleven during the actual legalization
of that. So Cronos, big downtrend here, having a nice push this week up 25
percent and then you can see that this downtrend here starting in March and now
finishing in December. At least the stock has finally higher it’s moving above the
ten-week moving average for the first time since, really since, the downtrend
started. Wouldn’t mind waiting for a weekly close
to kind of get there. This is the Marijuana Life Sciences ETF and what you
see is a big downtrend here hiding under the ten-week moving average just using
that has been a pretty good force. So finally the average stock in the medical
marijuana is pushing this thing above above the ten-week moving average so
that’s quite comforting. PPO is finally changing and on a weekly chart it makes
it look to me like I’d be interested in trading in these names. But I remember
two years ago thinking you know gee these things are just starting to
repopulate and then they rolled over into January. So just be very aware of
the earnings dates coming up because I think you could get ripped both ways.
Canopy Rivers, this one super surge and then nothing. We’ll just leave that here.
SEED, another ETF, pretty much down trending and finally a little move above
it, somewhat hopeful on the daily. The PPO was it a big downtrend and starting to
try and break through that, so that’s a little bit of good news. CannTrust
Holdings, this one popped two weeks ago above the ten-week
and has migrated sideways and is now starting to follow on. Again this thing
was a thirteen dollar stock down to a buck thirty, yeah, you get the idea
ninety percent off so maybe there’s a bounce in there to three bucks and get
back to the 40-week moving average. Insys Theraceuticals big
downtrend here trying to push back up, again, penny stock. Charlotte’s Web
Holdings big downtrend you know SCTR ranking of 0.5 that
means 99.5% of the stocks are behaving better than that so if you’re if you’re
buying down here you’re definitely bottom fishing. I’ll call it the rotten
fruit at the grocery store and we’ll see if they can start to turn up again. If
you’re a trader these are pretty interesting places to look on the chart
if you’re not a trader I don’t think that they’re ready for long-term
stability. OrganiGram is up 43% this week but from, you know from a two-year
low and all of a sudden it reverses so the shorts covered you got a down
sloping trendline here. I get it it’s a nice move. I think the real question is
you know do you want to buy it after a 40 percent move already so that’s a hard
one. Hydropothecary, HEXO, a big downtrend
here starting to work its way higher again it’s not even above the 10-week
and we got a downslope PPO. If you can start to see all of these turning up I
think that’s helpful obviously an industry group is gonna give you the
most part of the biggest part of the move is when the whole thing is lifting.
So if that was the case you could either play it through the ETF or you could
play it through these individual names. Again, volatility huge. Make sure you know
what you’re doing on the stop side. I wouldn’t let them get too big. Canopy Growth
chart didn’t load, let’s just try that again, so this is the one I
wrote the article about in Don’t Ignore This Chart, so you can go there and see
that. Anyway all of these charts are trying to pop today or this week there
aren’t weekly closes yet so when that happens then you can kind of investigate
it but you’re not late to the party you’re very
early and again a little bit of volatility off the lows might help kick
it up. So thanks for taking the time to join me on Market Buzz. Market Buzz airs
Wednesdays and Fridays at 10:30 a.m. Eastern Time you can also see the
recordings on StockCharts TV YouTube page and you can also find my U.S. and
Canadian market information on the StockCharts YouTube page and lastly don’t
forget about the schedule where I’ll be presenting next Tuesday * music *

How Does Shorting a Stock Work? And How is it Different than Buying Stock?

Dylan Lewis: Hi, I’m editor
Dylan Lewis, and on this episode of FAQ, we’re going to go through the long
and short of shorting stocks. When you buy a stock, you’re hoping that the
value will go up over time. When you’re shorting a stock, you’re expecting the opposite,
that the value of the company will go down in the future. Buying a stock is simple. You have
money in your account, you buy it, it’s yours. Shorting is a little more complicated.
When you’re short, you actually borrow the shares via your brokerage, and then immediately sell
them at market price. The proceeds from the sale get deposited into your account,
and you have an open short position. To close this position, you have to go out and buy
shares and return the same number of shares to the person you borrowed them from. 
A little example. You borrow one share at $10 and sell it. The $10 is deposited into
your margin account. Let’s walk through two different scenarios one month later. Shares
are at $7. You buy a share and return it to your brokerage and pocket the $3. Situation
two: shares are at $13. You’ll probably get a call from your brokerage asking you to put
more money in your margin account to cover the losses. You can either commit to the position
and put that money there or buy shares at market price, close out
the position, and eat the $3 loss. Shorting is a lot riskier than buying stocks,
and the main reason for that: the upside and downside are flipped. When you own a stock,
the worst case scenario is that you lose all of your money. In the example before,
you bought it for $10, the business fails, and shares go to $0, you lose your $10.
But on the flip side, if the business does well over time, the stock could double or triple, earning
you more than you originally invested. When you’re short, it’s the opposite. The most
you can gain is 100% of your money back, but you could lose more than you originally invested
because there’s no theoretical limit on the price of a stock. Say you were short,
and the stock tripled. You gained $10 by selling it after you borrowed it, but you now have
to go out there and buy it back for $30, meaning that you’re taking a $20 loss.
There are some other downsides to being short. You have to pay to watch your thesis
play out. Generally, there is a stock loan fee associated with shorting. It’s stated as a
percentage and you’re basically paying it daily, so every day that you have the
position open, it eats into your returns. You have massive downside with big earnings
surprises, M&A activity, or black swan type of events like Brexit and the U.S. election
results as well. When unexpected events like those happen, shares can spike as people that
are short panic to cover their positions, and this is called a short squeeze.
With shorting, you’re also betting against the general motion of the market. Historically,
the U.S. stock market has returned 6% to 7% annualized. Going short is a bet
against that general growth trend. Lastly, you’re on the hook for
dividends paid out while the shares are on loan. As a market tool, shorting is a good thing.
Allowing people to bet against companies creates an incentive for people to identify fraud,
and the shorts can also be a good check on irrational exuberance. But generally,
the average investor should stay away from shorting. It’s risky and complicated. Hopefully this
video made it a little less complicated. Thanks for watching, guys! If you enjoyed
this video, we have plenty more like it coming. Hit subscribe down in the bottom right and
give us a thumbs up. If you have any questions on things I hit in the video, drop them in
the comments section below. We love getting ideas for future episodes!

Why Companies Like Google And Facebook Pay Hackers Millions

Think about hackers. The term probably brings to mind
hooded figures operating in the dark, probably in a basement,
definitely in secret. They’re exploiting vulnerabilities, stealing our
money or our personal information, and costing
companies millions. In fact, cybercrime costs the world
an estimated $600 billion dollars per year. But the past decade has seen a
rise in a new type of hacker called an ethical hacker, or
a white hat hacker. These men and women want to use
their hacking know-how for good, and a legal market for their
skills has rapidly emerged. There’s this creativity, there’s this curiosity
and there’s this kind of almost mischief in how you think. But then that’s coupled with a
strong moral framework and ethical framework to actually use
that for good. These hackers help companies protect
themselves by finding vulnerabilities before the criminal hackers do. When an ethical hacker finds a bug,
they disclose the security issue in exchange for cash or other rewards, in
what’s known as a bug bounty program. So we’re like
a neighborhood watch. We come to your house, we look for ways
to break in, and if we can break in, we tell you. We don’t break in, we tell you
how we could have done it. Companies like HackerOne, Bugcrowd and Synack
have sprung up to connect freelance hackers with corporations that
offer bug bounty programs. This has led to the creation
of a geographically dispersed network of cybersecurity experts, a.k.a. hackers, who are integral to the
safety of corporations in every industry from tech to finance
to national defense. We work with MasterCard, we work
with Fiat Chrysler in the automotive space, we work with Cisco
in the engineering I.T. technology space, you know
Department of Defense, Pinterest. These days, hackers can make a lot
of money identifying security flaws for companies like these. The payout for finding a single,
highly critical vulnerability can be tens of thousands of dollars, and some
companies have paid out millions overall. I know Verizon Digital Media
actually just passed $7 million dollars in bounties paid. Uber has paid out
over $2 million dollars. Hacking for good is gaining traction
and there’s big money at stake. So it may be time for the public
to rethink its conception of what being a hacker really means. Ever since computers have existed, people
have been trying to break into them. Back when these machines were
clunky novelties found only in universities and large corporations, hackers
were commonly seen as tinkerers, technology enthusiasts who
liked exploring and altering existing computer programs. They made improvements that helped
move the industry forward. But with the emergence of the
personal computer in the 1980s, cybercrimes became much more common. From the comfort of their
living rooms, self-taught programmers learned how to break into and manipulate
important systems, pirate software and spread viruses. I broke into mostly websites
belonging to corporations, governments, military agencies and
just defaced them. I changed them. A lot
of people went to jail. Like a lot of
people got nasty letters. A lot of people got
knocks on the door. And that’s really the history of
hacking that actually precedes this season that we’re in now. Ended up getting arrested several times
by the federal government for that. And they sent me to prison for
27 months, 10 months and 14 months. Three separate occasions. Ellis began hacking in the 1990s,
and DeVoss in the early 2000s. By then, the hacker stereotype was
already well established, thanks to media like the popular 1983 movie
WarGames, which revolved around a disaffected but intelligent teen accidentally
hacking into a top secret military supercomputer nearly starting
World War 3. Even though the young protagonist wasn’t
malicious, the idea that computer whizzes could gain access to systems
like this terrified the public. After Ronald Reagan watched the film,
he proposed a number of anti-hacking bills resulting in the Computer Fraud
and Abuse Act, which prohibits anyone from intentionally accessing
a computer without authorization. And it hasn’t really
been changed since. So it is legal in the sense that
if there is authorization, then at that point they have safe harbor. But outside of that,
it is basically illegal. Because the law doesn’t really define
what “authorization” means, it isn’t exactly clear how it relates to
our new reality, where cybersecurity is increasingly outsourced. Security used to be
something you fix internally. It’s very secretive, it’s not
transparent, it’s not open. And we’re seeing a shift towards
security becoming more and more collaborative and enlisting
outside help. For a company, enlisting this outside
help often means starting a bug bounty program, in which corporations pay
hackers who report bugs or vulnerabilities in their software. What’s believed to be the first of
these programs came about in 1983, when a Silicon Valley startup called Hunter
& Ready offered a free Volkswagen Beetle to anyone who identified a
bug in its operating system. Over a decade later, in 1995,
Netscape began offering more straightforward financial incentives for finding flaws
in its popular browser, Netscape Navigator. The idea took a while to
catch on, but by the mid-2000s, security companies iDefense and TippingPoint,
as well as the Mozilla Foundation, offered similar programs. Other tech giants eventually followed suit, giving
rise to a new crop of startups like Bugcrowd, HackerOne and
Synack, which connect ethical hackers with companies offering
bug bounty programs. When starting one of these programs,
a company simply describes what type of vulnerabilities they want to be notified
of, what parts of their site hackers can test, and what
types of testing are allowed. They also determine how much
each bug is worth. Then the bug bounty platforms
verify the legitimacy of the vulnerabilities, coordinate payouts to hackers
and work with the companies to ensure that bugs are properly fixed,
greatly reducing the burden on a company’s in-house security team. On average, you get about a thousand
dollars per find, and the highest bounty we’ve paid is $100 thousand
dollars for a single vulnerability. Companies pay a fee to use bug
bounty platforms like HackerOne, but for the hackers themselves, these sites are
free and easy to join. You fill out your Twitter
handle, your LinkedIn I.D., your GitHub I.D., you know, that’s really the starting point
of how we figure out how to connect you with the
right programs going forward. Every time when you file a vulnerability
report to a company, you get scored by how good it was
and how serious it was. And then you are collecting points,
we call them reputation points. And then we can see in all these
metrics how good they are, what their special skills are, and that’s how we
can pick the right talent for every job. For hackers who were previously
operating illegally, the fact that you could now make good money this
way seemed difficult to believe at first. I was introduced to bug bounties
in 2014, but I didn’t actually participate because it still seemed like it
was too good to be true. Because if I get in trouble for
hacking illegally again, it’s life in prison. And I wasn’t willing to take
that risk on something that was so new. Eventually though, hackers like
DeVoss realized these platforms were for real, and their networks
have been growing rapidly worldwide. We have half a million
hackers in our network. Half of them are 24 years or younger. Some of them are as
young as 15 or 16. They can be all over the world. They have endless curiosity. They like to outsmart systems. And they figure out how to break
in, before the criminals can do that. Today, over 1,400 organizations use HackerOne
and over 1,200 use Bugcrowd. Even though many of these organizations
have their own internal security teams, the complexity of software
these days pretty much guarantees they’ll still have some weak spots. I don’t think there’s ever been a
company that’s come onto the platform that has had just zero vulnerabilities in
it, no matter how mature it is. There’s always something, because
humans make mistakes. And in recent years, these mistakes
have led to some high profile disasters. Equifax paid a $700 million
dollar settlement to consumers for its 2017 data breach. And in 2019, Yahoo! agreed to pay an $117.5 million dollar settlement for a series
of hacks that exposed the personal information of up to
three billion accounts. If you have a data breach, the average
cost to you is $7 million dollars, and many have had breaches that have
cost them $100 million or more. We help averting the breaches by
fixing the vulnerabilities ahead of time. And the price you pay for that is a
fraction of a fraction of the cost of a breach. Research and advisory
firm Gartner estimated that globally, cybersecurity spending would reach
$124 billion in 2019. Overall, the high cost of
preventing and mitigating cybersecurity threats has spurred a wide range of
companies from United Airlines to the Department of Defense to Goldman Sachs
to adopt bug bounty programs over the past five years. Probably the turning point in adoption for
what we’re doing was when the Department of Defense launched the Hack
The Pentagon project, which we’re now very much a part of. So there you have the world’s
largest organization, with the most powerful weapons in the world, unlimited budgets,
and they’ve concluded that to be truly secure, they need
the help of hackers. And we’ve found already over
12 thousand vulnerabilities for the Department of Defense. That’s like the greatest part of it, is
being able to hack like the U.S. government and military, and not worry that
your door is going to get kicked in by a SWAT team anymore. Because that’s happened four
times to me. These days, rather than getting
arrested, DeVoss’s hacking obsession has made him wealthier than
he’d ever imagined. In total, he’s netted well over $1
million dollars over the course of his ethical hacking career. I’m at $840 thousand dollars
just on HackerOne for 2019. If you add in the other platforms,
then I’m a little over $900 thousand for the year. Only a select
few have matched his success. But their backgrounds provide an
interesting glance into a diverse network. We have six hackers today who
have made more than a million, and the first one to get to a million
was 19 year old Santiago Lopez in Buenos Aires. So no university education, no background
in a tech center in the world. Just endless curiosity, a good
sense of computers and mathematics and hard work. And
he earned a million. CNBC got Lopez on the phone
to talk about his accomplishments. At the beginning, when I started hacking,
I didn’t knew that I was going to make a million. It
was like impossible for me. So it was a very good surprise. But despite the incentives for hackers
and organizations alike, the grand majority of companies still
don’t offer bug bounties. Actually, most don’t even offer
any sort of vulnerability disclosure program, which would allow hackers to
report bugs without fear of punishment. A vulnerability disclosure program
is extremely similar to a bug bounty program. You’re still allowed to
hack into the system as long as you report it to them. The only difference is you don’t
get paid for your vulnerabilities. While this may seem like an easy
win for organizations, the most recent HackerOne security report revealed that 93
percent of companies on the Forbes Global 2000 list don’t
have any vulnerability disclosure policies. Without a proper channel
to report security issues. HackerOne says nearly 1 in 4 ethical
hackers have failed to disclose a vulnerability that they’ve found. Luckily, the industry is showing some
trends in the right direction. At the end of 2019, the
Cybersecurity and Infrastructure Security Agency issued a draft of a mandatory
directive that would require all government agencies to adopt
vulnerability disclosure policies. HackerOne and Bugcrowd hope this means
that more companies will follow suit. And to ensure that the talent
pool is able to meet the growing demand, both even offer their own
free educational initiatives to teach newbies the basics of hacking. The Internet is a pretty,
pretty gnarly place these days. And really what it comes down to
is that you can’t control what an attacker is going to do, but you can
control where your defenses are up to when they arrive. As for the
individuals on these platforms, they just want people to know that despite what
you may have heard about “hackers”, in the world we live in
today, they’re often on our side. They always see the hacker like the bad
guy, but he’s the good guy now. We’re here to help. We’re not just
some sketchy people in their mom’s basement who are out
there to cause damage. We’re professionals who work in the
industry who actually wanna make the companies better.

Betty Liu explains financial market impacts from global unrest | Money in :60 | GZERO Media

I’m Betty Liu, with your Money In 60 Seconds. Let’s get started. So geopolitical events do affect financial markets. And these events are everything from wars, civil unrest, natural disaster, terrorism. During those times, investors flock to safe haven assets. So, that can be gold, it can be defensive stocks that generally have stable earnings and dividends. As you saw back in 9/11, investors flocked to safe haven assets. So, Iran is in a region that accounts for about a third of the world’s oil. So, what you saw was oil prices spike to a seven year high to seventy dollars a barrel. There was concern at that time that basically, oil production would be disrupted. And so that’s why you saw investors flock to safe haven assets. That’s your Money In 60 Seconds.

Amazon Pay is Growing Fast – Should PayPal and Apple Pay Be Worried?

Jason Moser: Let’s kick right
off here talking about Amazon. There are a few different
points to this discussion we want to get to. We’re talking primarily about Amazon’s effort
to gain more share in the payments space. That’s through Amazon Pay. We can couple this discussion also with the
fact that according to Adobe Analytics, Black Friday pulled in a record $6.22 billion in
online sales, which was up almost 24% from a year ago. It was the first day in history to see more
than $2 billion in sales stemming from smartphones. That’s where I really want
to pick this conversation up here. Not only are we living in an e-commerce world,
we’re certainly living in a mobile world, as well. For a lot of us, Amazon Pay probably isn’t
top of mind, yet we’re reading now that they’re really making efforts to gain share, it seems
like initially with companies that are not necessarily direct competitors,
like gas stations or restaurants or what have you. It does seem like they’re trying to take a
little bit more of that role in the transaction, much like we’ve seen Apple do to date
with Apple Pay. But it’s also not just Apple. There are all these payments companies out there,
trying to get a little piece of that transaction. Talk a little bit about your
experience with Amazon Pay. Give us a little bit of your perspective here
as to what the endgame is with Amazon. Matt Frankel: I was on
a certain retailer’s website. I can’t tell you what I bought, or who I bought
it from, because it was an anniversary gift for my wife, who listens to the show.
Moser: Oh, so you really can’t. I was going to say, “You can’t,
or you won’t?” But it’s both. Frankel: I really can’t. It was a small business, something you
would see featured on Shark Tank. It struck me as somewhere that gets most of
their sales from Amazon to begin with. This was directly on their website. I went to check out, they were
having a great Black Friday sale. I went to their website,
selected my products, and went to the checkout. And there were two buttons. There was
a PayPal button and an Amazon Pay button. I was curious, because I had never
seen that on a merchant’s website. Amazon really hasn’t
pushed it until recently. So, I clicked Amazon Pay, and it took me right
to my Amazon checkout, where I have my Amazon credit card already set up. It was just like
checking out for a normal Amazon purchase. It took me about two clicks. It was very easy. I was actually going to use PayPal,
and I like this alternative because it lets me keep all my purchases in one place. I’d say about 50% of what my wife and
I order is already through Amazon. It lets me organize my purchases
into one payment portal. I actually think PayPal might
have something to worry about here. Moser: That’s a good perspective there. I want to ask you, the initial thing that
comes to mind here where I think they may have a little bit of a challenge, we know
that to date, the U.S. consumer isn’t necessarily all that digital-wallet-focused yet. That’s still something that we’re in the very
nascent stages of, and I think it’s going to take a while for
that behavior to really change. You look at something like Apple Pay,
for example, as clever as that is, consumers still aren’t embracing that wholeheartedly. Whether it’s Apple Pay or Google Pay or Amazon Pay,
the digital wallet, there’s a big opportunity there. That explains why
Amazon is pursuing this. The one hang-up here I have with Amazon and
the process that you just described, it sounds like there’s a little bit more friction in
there vs. if I go somewhere, whatever website it may be, and I have the option to pay with Apple Pay.
When it says, “Do you want to use Apple Pay?” And you can just use your thumbprint to verify
the transaction, as opposed to having to go to another website and
verify that purchase. What I’m getting at here is ultimately,
it feels like Apple, and to a degree Google, have a hardware advantage
that Amazon doesn’t have to date. Does that make sense?
Frankel: Yes, but here’s my perspective on that. I don’t necessarily think this will steal
any market share from people who are already on Apple Pay or PayPal. Both of
those are, like you said, very easy portals. They both have hardware
advantages over Amazon. But there are a lot of people who are not
using digital wallets yet who are already comfortable with
Amazon’s checkout process. I don’t necessarily think they’re going to
steal market share or steal existing customers from any of the other ones, but I do think
it gives them an advantage recruiting new adopters to digital wallets.
Moser: Probably, you’re right. We talk about this all the time, this is not a zero-sum
game. It’s not as if one wins and everybody else loses. This is a massive opportunity out there. At the end
of the day, money is going everywhere. That’s what dictates everything, basically,
is money getting from point A to point B. Pursuing even just a small piece of that pie
makes a lot of sense, particularly in Amazon’s case, because really, you have to figure for
them, this is a very easy bet to make. The business certainly isn’t hinging on it.
At the most, they get a tiny scrape of that transaction. When Apple Pay is used, Apple gets a very,
very tiny scrape of that transaction. It’s not terribly meaningful. It becomes meaningful if you have a billion
people using it on a consistent basis. And obviously, we’re not to that point yet. But even beyond the financial implications,
I would imagine that a company like Amazon, as smart as they are about using data and
doing things with that data, just gleaning the data from transactions like these would
be seen as a reasonable pay-off. Frankel: Right, and that seems
to really be what they’re after here. I’ve actually read that Amazon is subsidizing
the swipe fees for merchants — not swipe fees, but whatever the
swipe-fee-equivalent of digital wallet fees are. They’re actually subsidizing the fees to get
retailers to put the Amazon Pay button on their website at a lower cost to them. It’s fair to say Amazon’s not making money
on this, but it’s expanding their reach. Anything that expands Amazon’s reach, data-wise,
customer-wise, merchant-wise, is good for the long-term business.
Moser: Makes sense to me. I don’t think Amazon’s going to ever going
to have a hardware advantage at least on the smartphone side.
They tried with the Fire phone. They were late to the game, tried to do something
a little bit different, but there was nothing terribly compelling to get someone to switch, particularly
if you’re already used to a certain operating system. I’m also skeptical when it comes to incorporating
things like voice assistant technology into actually paying for things.
With all that said, things change very quickly. Technology is evolving
seemingly on a daily basis. I’m going to be interested
to see where Amazon takes this. Amazon Pay has been around for a while,
they just haven’t done much with it. Perhaps we’re entering this stage now where
consumers are going to be a bit more open to adopting digital payments
and digital wallets and whatnot. If that’s the case, clearly we can see there’s
a lot of market share there to pick up. For Amazon to try to be
a part of that makes perfect sense. Frankel: To be perfectly clear, PayPal, Amazon Pay,
and Apple Pay all have tremendous growth runways. PayPal’s growth rate could go from 20% to 19%.
I’m not saying they’re going to really suffer. To be clear, I still love
PayPal on a long-term basis. Moser: Gotcha! We want to make sure we respond
to the inevitable e-mail we’re going to get. We’re not saying, “Short PayPal, long Amazon.”
You’re probably saying go long on both, right? It’s reasonable to just diversify your portfolio,
own shares in both companies. Frankel: Right. Both companies
are going to be winners. I could just see the tweetstorm going off
in my head when I was saying that. Moser: Well, we’ll get out in
front of it if that does happen.

How To Legally Pay $0 in Taxes – How Billionaires Do It

This video is made possible by the Great courses
Plus. Start Your Free trial by clicking the link
in the description. In July of 2017, Jeff Bezos made history and
surpassed bill gates as the richest man in the world with a net worth of 153 billion
dollars. To understand his scale of wealth, let’s look
at some numbers. Earlier this year, Jeff announced that he
is separating from his wife Mackenzie but because they live in Seattle,
his wife has the right to a large portion of his wealth, to be more precise – 35 billion
dollars, that will make her 3rd ri chest woman in the world. But Jeff isn’t worried because he will still
be on the top of the list with over 110 billion dollars. That’s how rich Bezos is, he can afford a
divorce and still be on the top of the Forbes list. Behind his enormous wealth, stands a conglomerate
and if you know anything about Amazon, you know that it is on the way to take over the
world. But did you know that this company that’s
valued almost at a trillion dollars, paid 0 dollars in federal taxes? To understand how this guy with such a loud
laugh is making billions of dollars while not paying taxes at all, we have to take a
look at history! We know Amazon as the place to go for online
shopping. But for Netflix, uber, and thousands of others,
Amazon is their way to the internet. They rely on amazon web services for their
websites to function. What started as a side project to support quickly grew into a multi-billion dollar company by itself, earning more money
than Amazon ever had. In fact, if you take a look at the numbers,
more than 41 percent of the internet relies on AWS. Only big corporations such as Google, Microsoft,
and Facebook aren’t on the mercy of Amazon since they are big enough to build their own
infrastructure. But that’s not the only industry that Amazon
has its grip on. Even for us, the consumers, Amazon is no longer
the middleman who connects buyers with sellers. It’s becoming the seller itself. Amazon now sells more than 450 if its own
brands from watches to clothes. Cables to furniture. Competing with the rest of sellers on the
platform to be on the top of the list and since its Amazon, they definitely know how
to keep their products on the main page. And its only a matter of time before everything
that’s sold on Amazon will be produced by Amazon itself. for an Amazon box to reach your door, it needs
to go through many hands. from a tuck to a plane to a van and maybe
then to your doorstep. and Amazon has heavily been relying on UPS, FedEx and US postal service. but that’s about to change. To be more precise, it’s already changing. Amazon now has more 50 planes and hundreds
of vans and semi-trucks to ship its own products. It already handles a quarter of its shipping. and it doesn’t seem to stop there. Remember Amazon web service, it started to
provide servers to Amazon websites but quickly began providing servers for everyone else.
and it seems like Amazon wants to do the exact same thing with Amazon fulfillment and become
a logistics company. Although Amazon is a small fish compared to
UPS and FedEx in the logistics industry. Amazon is on its way to change that. Once Amazon is completely self-sufficient,
it can easily drive shipping cost down. It doesn’t have to make a profit since it
has multiple other businesses that already generate billions of dollars in revenue and
once UPS and FedEx are out of business, then Amazon can slightly increase the prices and
enjoy unbelievable profits since it will the only player in the market. Amazon doesn’t just want to be the place
where you periodically buy strange gadgets. It wants you to buy groceries at Amazon, that’s
why it purchased whole foods market. Many of us still prefer to physically go to
the store but we all know that it is about to change. and Amazon doesn’t want to miss the opportunity
to take over the industry. The grocery business is definitely competitive
but no one is more qualified to do that than Amazon. They have the technology, experience, and
money! Even though Netflix relies on Amazon. Amazon is on its way to change that. In 2010, Amazon launched Amazon studios to
challenge Netflix. Of course, they are too small to be compared
to Netflix, but that’s what the bookstore managers said when Amazon started selling
books online. They will keep pouring money and creating
as many shows as they need to convince you to switch to Amazon studies. And unlike Amazon. UPS, FedEx, and Netflix do not have a side
business that earns them a pile of cash! You see, Amazon is playing the long game,
Instead of making a profit, amazon simply reinvests its revenue back into the company
to grow bigger and faster. In fact, sometimes the company didn’t even
make a profit because they poured every dime they made back into the company to take over
other industries and reported a loss although they could have made billions of dollars in
profit. And when you make a loss as a company, you
can carry them forward and write them off from future tax bills, which is what Amazon
has been doing. But that’s not all. Every nation wants its companies to be technologically
competitive. So to encourage companies to spend more and
more on research and development, governments offer tax credits and amazon is simply taking
full advantage of that. Its spending billions of dollars to automate
its warehouses for example. build better gadgets and voice assistant like
Alexa. It’s improving its web services to stay competitive
and pouring billions on amazon go for example. On top of that, the recent changes by Donald
Trump on the tax code made it even better for Amazon. Now, they can write off their depreciation
right from the beginning instead of splitting it for over multiple decades. And then there is stock-based compensation. It’s actually a common practice among the
companies. Instead of paying their employees in cash,
amazon pays them in amazon shares that it creates out of nothing and then simply writes
off those shares from its tax bills. In this way, Amazon isn’t only getting free
employees but also lowers its tax bill significantly. Last year, it reported over a billion dollar
in stock-based compensation tax benefits. It’s simple but quite nasty! Its sounds simple in theory but quite difficult
in practice, because to do this you need the stock price to constantly rise and if you
give it a closer look, it’s a very well planned strategy. Amazon makes billions of dollars in revenue
but then uses that cash to take over other industries and deducts it from its tax bill,
that keeps the stock price increasing which allows amazon to pay its employees in stocks
instead of cash and writes that off again from its tax bill. So, at the end of the day, the company keeps
growing making Jeff Bezos wealthier but their tax bill stays fairly moderate. In 2018, the company reported 11.3 billion
dollars in profit, instead of paying 35% corporate tax, it had to pay only 21 percent or 2.37
billion dollars since Donald Trump reduced the corporate tax to “keep American firms
more competitive”. But amazon’s tax credits and stock-based
compositions amounted to 2.5 billion dollars. So instead of paying income tax, amazon actually
got a 129 million dollars tax refund. In fact, it wasn’t their first year, a year
prior to that, in 2017, the company also paid nothing on its $5.6 billion U.S. profits and
claimed a tax fund of $140 million. It seems like Bezos long term strategy paid
off. Just to be clear, that doesn’t mean that
Amazon doesn’t pay taxes at all, it still pays state, local and international taxes
for example. But their tax bill is significantly smaller
compared to their size. At the end of the day, how many trillion-dollar
companies do you know?! Whether it’s good or bad, that’s up to
everyone’s interpretation, but Amazon is simply taking advantage of the system and you can’t
really blame them for that. In fact, they are not the only one, companies
were doing that for decades. Remember, the purpose of any business is to
maximize profit and not pay taxes. On the other side, Amazon has provided jobs
to hundreds of thousands of people, not only in America but around the globe. It’s the second biggest employer in America
just behind Walmart. Thats probably the main reason why amazon
has been growing exponentially since its inception. If you have invested just a thousand dollars
in amazon back when it was founded, you would be have made 1.3 Million dollars by 2018. Don’t worry if you have missed the opportunity
because the stock market is filled with such opportunities. Even if you know nothing about the stock market,
this course on the stock market by The Great courses Plus will teach you everything you
need to know. I have taken the course. Its simple, clear and straightforward. they have great courses from top professors
from the Ivy League and other great universities. And a huge library of over 11,000
video lectures about anything that interests you…science, math,
history, literature, you name it! Perhaps you want to learn about the inventions
that changed the course of the history. Then you have to take this course by Bernard
Calson. You can try the great courses Plus with a
free trial that they are offering you. Click on the link in the description to get
your free trial today or go to

Should You Transfer Your Final Salary Pension?

Welcome to the Morningstar series, “Ask the
Expert.” I’m Holly Black. With me in the studio is Steve Webb. He is Director of Policy at
Royal London. Hello.
Hi, Holly. So, we’re talking pensions today and you are
telling us about the difference between defined benefit and a defined contribution pension
scheme. So, defined benefit sometimes called final
salary is often you hear it called is the older style of pension. So, you used to work
for a big company, and they pay you a pension that was like a hard promise. You’ve earned
this amount of money; you’ve served this number of years; you’ll get this percentage of your
final salary when you retire. Fantastic. Great. So, that is the kind of thing that you want.
That’s tended to go these days. Companies have shut them, because they’ve become a lot
more expensive than they expected and these days you’re more likely to have a pot of money
pension called a defined contribution, because the only thing that’s defined is what’s going
in. That’s what we know. What we don’t know is how well it will do when it’s invested.
We don’t know what sort of pension it will buy you when you retire. It’s flexible. It
has its advantages but it’s not the same as the old style.
And some new rules that came in a few years ago mean that if you do have one of those
older style pensions, you don’t have to stick with it. You can move it into sort of a SIP
and choose how you invest it yourself. Why might someone do that?
What can happen is, if you’ve got an old-style final salary pension of, let’s say, £10,000
a year. Instead of taking that £10,000 a year when you retire until you die, the pension
scheme might say, we will give you instead £300,000. That might be an example. And you
can take that money and put it into a pot of money pension at different sort of arrangement.
And the big plus of that is flexibility. So, for example, from the age of 55 you can start
drawing on that. Now, there’s tax to be paid and of course, it might not last you until
you are 85 or 90. But it is much more flexible. People like that because if they were to die,
perhaps if they don’t have a spouse, but they have children or something like that, then
the pot is left for the children. Whereas a company pension, not much might go to the
children. So, it generally allows people more choice, more flexibility, maybe retire a bit
earlier and spend some of the pot, keep them go until their state pension starts. That’s
why a lot of people see this very large amount of money, see the flexibility and find it
quite attractive. But the regulator has said – they are actually
concerned that too many people were doing that, and it might not be the right decision.
Because there are a lot of reasons to stick with that older style pension scheme, aren’t
there? There are. And the regulators say that when
you take financial advice, the advisor has to start from the assumption you should stay
put, from the assumption that you shouldn’t move unless there’s a good reason to move.
And some of the attractions of staying put are first of all this income is pretty much
guaranteed. It lasts as long as you do. It goes up in line with inflation in most cases.
And if you’re retired for 20 or 30 years, that really matters. And you don’t have to
worry about the stock market going up or down. That’s the pension scheme’s problem; not yours.
So, that element of certainty, predictability, guaranteed income, because you don’t know
how long you’re going to live, you don’t know how the markets are going to do. All that
risk is taken care of for you and that’s a very attractive and valuable thing.
This is probably one of the most important decisions people will make in their life if
they do have this choice. So, what is the right thing to do?
Well, even if your pension is worth only about £30,000 and that’s a pot of £30,000 not
an annual pension. So, most of these old final salaries you are going to draw be above that
level. By law, you have to take financial advice. But a couple of things. First of all,
listen to it, because it’s tempting to think, I see this amount of money might be bigger
than value of my house. I want my hands on it. I don’t care what you, the advisor, say.
I just want my cash. That’s you know – if you’re in a hurry, take a big deep breath.
And the other thing also is to ask some pretty searching questions about where the money
is going to go to. Because many advisors are impartial. They’ve got your best interest
at heart. But some of them have got incentives that actually they want to manage your money.
They want another slice every year. And you just need to ask a lot of questions about
the charges you’ll face if you do a transfer. So, be sure there’s a good reason to transfer
and start from the assumption that you don’t. And then listen carefully to the advisor,
be quite – you know, ask some tricky questions. Well, thank you so much for your time.
Thank you. And thanks for joining us.