Sentiment Speaks: It's Time To Challenge What You Think You 'Know' About The Stock Market

Recent price action

The S&P500 dropped from the resistance region I had cited, and provided us with the minimum 30 point drop I was looking for (we dropped 34 points from the prior all-time high). As we caught the lows last week in real time, the market is trying to push up towards our next higher target in the 2611SPX region.

Anecdotal and other sentiment indications

I know I am not the traditional author you come across here on Seeking Alpha. Most others will provide you with traditional notions of the stock market based upon rationalities. So, many authors will suggest that we “cannot separate public policy and geopolitics from the markets,” they will focus on “market valuations,” they will claim that “fundamentals do not support this rally,” and will provide you with many, many other reasons as to why they have continually believed that this rally would never happen.

Yet, they have been left on the sidelines, scratching their heads for the last year and a half, as the US equity markets have rallied over 45% since February 2016.

I mean, think about all the reasons they have put before you over the last year and a half regarding the imminent risks facing the stock market, which they have lead you to believe will stop the market in its tracks. I have listed them before, and I think it is worthwhile listing them again:

Brexit – NOPE

Frexit – NOPE

Grexit – NOPE

Italian referendum – NOPE

Rise in interest rates – NOPE

Cessation of QE – NOPE

Terrorist attacks – NOPE

Crimea – NOPE

Trump – NOPE

Market not trading on fundamentals – NOPE

Low volatility – NOPE

Record high margin debt – NOPE

Hindenburg omens – NOPE

Syrian missile attack – NOPE

North Korea – NOPE

Record hurricane damage in Houston, Florida, and Puerto Rico – NOPE

Spanish referendum – NOPE

Las Vegas attack – NOPE

And, each month, the list continues to grow.

Yet, the same authors you have read for years just continue to repeat their mantras that we “cannot separate public policy and geopolitics from the markets,” they continue to focus on “market valuations,” and they continue to claim that “fundamentals do not support this rally.”

Einstein was purported to suggest that insanity is doing the same thing over and over while expecting a different result. But, you see, in the stock market, there is a bit of a difference. Just as trees do not grow to the sky, the stock market will not rally indefinitely. So, we will eventually see a bear market. Then, the broken clock syndrome will prove these authors to be “right,” rather than simply insane, and we will hear it from them incessantly about how they tried to warn us. Yes, warn us indeed.

Now, that does not mean we should expect analysts to be right all the time. Clearly, I was expecting the set ups we have seen in the metals market to spark a big rally in 2017, but when we broke upper support back in September, it caused me to turn quite cautious until 2018. But, the difference is that I use an objective methodology that listens to what the market is saying rather than trying to force a predetermined linear perspective on the market.

And, that is the issue with most of the bearish presentations you have read for the last year and half about the stock market, while they claim they are simply “opening your eyes to the inherent risks in the stock market.” Let me ask you a question: Is there anyone reading this article that believes the stock market does not have risk at all times? I will not belabor this point, but, needless to say, these bearish presentations couched as “risk awareness” is not based upon objective perspectives on the stock market.

My friends, look at the events I have listed above yet again. None of them (nor ALL of them cumulatively) have been able to put a dent in this market advance over the last year and a half. So, rather than view the market from a perspective of insanity, maybe one should come to the conclusion that public policy, geopolitics, market valuations, or fundamentals are really not what drive the stock market. Clearly, we have seen that none of this has mattered one iota. So, maybe we need to consider that there is a stronger force at work which overrides any of the traditional perspectives you were lead to believe drives the market?

Bernard Baruch, an exceptionally successful American financier and stock market speculator who lived from 1870– 1965, identified the following long ago:

All economic movements, by their very nature, are motivated by crowd psychology. Without due recognition of crowd-thinking … our theories of economics leave much to be desired. … It has always seemed to me that the periodic madness which afflicts mankind must reflect some deeply rooted trait in human nature — a trait akin to the force that motivates the migration of birds or the rush of lemmings to the sea … It is a force wholly impalpable … yet, knowledge of it is necessary to right judgments on passing events.

Price pattern sentiment indications and upcoming expectations

The upcoming week is rather simple, and centered around the 2572SPX region. As long we hold over the 2572SPX early in the coming week, we are on our way to the 2611SPX region.

However, if we break down below 2572SPX early in the coming week, it opens the market up to another decline which will revisit the 2520-2550SPX support region before we finally rally to the 2611SPX region.

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Housekeeping Matters

For those looking for accurate insight into various markets, including VIX/VXX, FOREX, Dow Jones, etc., I also HIGHLY suggest you read Michael Golembesky’s work on Seeking Alpha.

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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Tech

Facebook Friends With Your Co-Workers? Survey Shows Your Boss Probably Disapproves

You and your colleagues pitch in together on difficult projects, lunch together, and have drinks together after work. You probably think it’s the most natural thing in the world to friend them on Facebook or follow them on Twitter or Instagram. Your boss, though, probably thinks you shouldn’t.

That’s the surprising result of a survey of 1,006 employees and 307 senior managers conducted by staffing company OfficeTeam. Survey respondents were asked how appropriate it was to connect with co-workers on various social media platforms. It turns out that bosses and their employees have very different answers to this question.

When it comes to Facebook, 77 percent of employees thought it was either “very appropriate” or “somewhat appropriate” to be Facebook friends with your work colleagues, but only 49 percent of senior managers agreed. That disagreement carries over to other social media platforms. Sixty-one percent of employees thought it was fine to follow a co-worker on Twitter, but only 34 percent of bosses agreed. With Instagram, 56 percent of employees, but only 30 percent of bosses thought following a co-worker was appropriate. Interestingly, the one social platform bosses and employees seem to almost agree about is Snapchat, with 34 percent of employees thinking it was fine to connect with colleagues, and 26 percent of bosses thinking so too.

What should you do if you want to connect with a colleague on social media–if you get a connection request from a colleague? Here are a few options:

1. Use LinkedIn.

LinkedIn was not included in the OfficeTeam survey, but because it’s a professional networking tool, few bosses will object to you connecting with coworkers there. And LinkedIn has many of the same features as Facebook–you can even send instant messages to your contacts.

2. Keep your social media connections secret.

Most social networks give users the option to limit who can see what they post and who their other connections are. You can use this option to keep your social media interactions limited to the people you choose. If that doesn’t include your boss, he or she may never know that you and your co-workers are connected.

3. Talk to your boss.

He or she may not agree with the surveyed bosses who said connecting on social media was inappropriate, in which case there’s no problem. And if your boss does object, he or she may have some good reasons you hadn’t thought of to keep your professional life separate from your social media one. The only way to find out is to ask.

4. Consider the future.

It may be perfectly fine to connect with your co-workers on social media when you’re colleagues. But what happens if you get promoted to a leadership position? You may regret giving your former co-workers access to all the thoughts you share on Facebook or Twitter. So if a colleague sends you a social media request, or you want to make one yourself, take a moment to think it through. Will you be sorry one day–when you’re the boss yourself?

Tech

Tezos Rebuffs Rumors of SEC Probe Into $232 Million Crypto ICO

The founders of the blockchain startup Tezos moved to quell rumors of an investigation by the Securities and Exchange Commission, stating on Friday that the agency has not contacted them.

The denial, which came in response to an inquiry from Fortune, could tamp down some of the recent drama around Tezos, which raised $ 232 million this July in a high-profile “initial coin offering,” or ICO.

The Tezos ICO followed a familiar model in which participants handed over money, in the form of crypto currencies bitcoin and ethereum, in the hopes of receiving digital tokens in the future. In the case of Tezos, the plan is to create tokens (known as “tezzies”) for use on a new type of software that governs contracts on a blockchain.

The Tezos sale, however, came amid growing concern by regulators that ICOs can amount to the unlicensed sale of securities, and be used to fleece investors. In July, the SEC broke its silence on the issue by describing ICOs as “a new paradigm” for fundraising, while also warning that the agency would take action against companies whose tokens too closely resembled speculative investments.

All of this led some people to suggest that Tezos, and its young husband-and-wife co-founders, Kathleen and Arthur Breitman, had fallen afoul of U.S. securities law. These people, who made the claims on the condition they not be identified, include prominent figures in bitcoin and crypto-currency circles.

Rumors of possible investigations surged anew last week in light of a very public spat between the Breitmans and the director of the Tezos Foundation, a Swiss non-profit tasked with using the proceeds of the ICO to support the development of the Tezos platform.

The spat involves the foundation’s director, Johann Gevers, accusing the Breitmans of threatening the foundation’s independence. The Breitmans, meanwhile, have accused Gevers of incompetence and self-dealing, and claimed he misrepresented to foundation’s board the size of a $ 1.5 million bonus he sought to receive.

The situation, which is so far unresolved, has given rise to headlines like one in the Financial Times this week that said “Acrimony over $ 232M ICO to intensify regulatory scrutiny.”

Any trouble Tezos may be facing, however, does not appear to include an SEC investigation, which would be a devastating development and pose potential civil or criminal trouble. In two phone interviews with Fortune, Kathleen Breitman said Tezos has not received any inquiries from the SEC.

This is not proof Tezos is out of the regulatory woods. But in regard to an SEC investigation, it is reasonable to surmise the agency would have probably have contacted the Breitmans by now if something was afoot. (The SEC, meanwhile, last week announced its decision to prosecute another individual over two ICOs that took place in August).

A spokesperson for the agency, which does not disclose investigations unless they lead to disciplinary action, declined to comment.

Following the publication of this story, the Breitmans provided the following statement: “While an investigation would certainly be a distraction, other projects have weathered regulatory issues and so far the SEC’s approach in this area has been measured and reasonable. We will cooperate fully with any investigation if one materializes.”

Mess in Switzerland

The absence of an SEC investigation would be good news for Tezos supporters, who have grown skittish amid the negative publicity and questions about when the promised tokens would arrive (the Breitmans say that February is most likely).

Nonetheless, the Tezos project still faces challenges given the ongoing acrimony between the Tezos founders and Gevers over the direction of the Tezos foundation in Switzerland.

Under a complex legal arrangement, the foundation is supposed to purchase a company from the Breitmans that holds the code and other intellectual property related to the Tezos platform. But given the clash with Gevers, it’s unclear when or if that will happen.

Meanwhile, Gevers has told the Wall Street Journal that the Breitmans’s move to influence the foundation goes against Swiss law. The couple has since challenged the claim by obtaining a legal opinion that anyone may seek the removal of a foundation director in situations such as mismanagement.

The upshot is that the fight might take months or more to untangle, and could lead to litigation. And while the Breitmans claim their current focus is on completing the software, the foundation fight will likely create uncertainty—which is reflected in reports that the value of tezzies tokens has dropped significantly in futures markets.

Finally, it’s unclear who exactly is controlling the hoard of wealth Tezos is now sitting on. Since July, when the token sale took place, the value of bitcoin and ethereum have soared, which means the $ 232 million collected at the time is now worth much more. According to Reuters and others, the foundation is slowly converting the digital currency to cash.

As for how the cash is being managed on a day-to-day basis, Arthur Breitman said the question is one for the foundation, and that he could only say there are mechanisms in place to safeguard the funds.

Gevens did not respond to a request for comment, made after business hours in Switzerland, about how the money is being managed or about the salary allegations against him.

(An earlier version of this story incorrectly stated Gevens received, rather than sought to receive, a $ 1.5 million bonus)

Tech

These 3 Companies Are Set For A Horror Story

For investors, the end of October is quite a busy time of the year. With several earnings reports coming out every day, your head could be spinning if you tried to follow all of them. Today, I’m doing you a favor by highlighting 3 stocks you should seriously consider selling now that I have read their earnings report. And I’m not going after some small names here; I’m going for popular dividend stocks that have blinded investors either with their yields or promises. I’m talking about AT&T (T), IBM (IBM) and Polaris Industries (PII).

AT&T is a zombie disguised as Snow White

Behind its perfect reputation of a long time dividend payer and its high yield hides a hideous dead company.

Source: T Q3 2017 presentation

Great! Some will tell me free cash flow has increased by 13% compared to last year. But this is only because the company spent less money in CAPEX. The company is generating the same level of cash flow as it did in 2016. The problem is that the cash flow stagnation has been around for a while now:

Free cash flow hasn’t moved a dime over the past decade. How can you explain that? The company is getting bigger and bigger, but the cash flow isn’t. A known problem for all telecoms is the increasing amount of money required to build the strongest network possible. We all know future spending will happen to manage various situations:

  • 5G is coming.
  • Competition is growing with T-Mobile (TMUS) and Sprint (S) going after AT&T and Verizon (VZ) customers.
  • The integration of Time Warner.
  • Something to do with DirecTV.

Speaking of DirecTV, this acquisition doesn’t seem to be going anywhere. Although T-Mobile offers free Netflix packaged with its unlimited data plans, AT&T thinks it can do better by offering its own service. However, what I see is that AT&T is killing DirecTV and hopes DTVnow will fill the empty space and generate growth in the future.

Source: AT&T Q3’17 Investor Briefing

In the good news department, AT&T’s yield will shortly reach 6% as the stock drops like a rock. With rising debts and a payout ratio around 90%, I think it’s time to wonder how many years T will be able to sustain its current dividend raise streak. After all, management keeps raising its payouts year after year, but you can’t really call an 8.89% total growth over 5 years a dividend growth policy.

In the end, I’m afraid AT&T will be more preoccupied with figuring a way to integrate Time Warner and DirecTV into its activities than building its 5G network. At some point, the company will not have enough cash to support all its projects.

IBM is making promises it can’t keep

IBM celebrated its 22nd consecutive quarterly report with declining revenue. 22 quarters means 5½ years of poor results. What did the market do to celebrate with IBM? Yup, it threw up a party and the stock soared by 9%. But the enthusiasm is rapidly fading away:

Source: Ycharts

Strategic imperatives revenue was up by 10% and cloud revenue was up by 12%. Ah! That’s a reason to boost share value through the roof isn’t it? While I totally get that it’s good news that management has finally found a way to get the business growing again, its other business segments are still decreasing faster. Considering the choices you have in the techno sector, I think you are way better off with Microsoft (MSFT), which didn’t need 5 years to figure out to make money with the cloud business.

On the dividend side, once could argue that buying IBM at a 4% yield is a unique opportunity (similar to buying AT&T at a 6% yield, I suppose). The problem is that IBM is buying back shares and increasing its payout to seduce income seeking investors.

Source: Ycharts

Please note this graph shows the variation in %, not the actual payout ratios. As shares are being bought back and dividends being raised, you can see management is not following its earnings growth. While IBM’s payout ratios were around 20% 5 years ago, they have doubled since then. As they are getting closer to 50%, you can expect a smaller dividend growth rate in the years to come, not to mention the rising debts siphoning future money away from its bank account.

Polaris Industries is not out of the woods yet

Polaris is making a strong comeback after 2 years of desolation. Sales weren’t good and many recalls hurt Polaris’s brand (and earnings). However, the stock is now back up with a strong quarter showing sales increases of 20%. PII stock price surged on earnings by $ 16 on a single day. The stock is now up almost 50% since the beginning of the year (as of October 25th at closing). Unfortunately, this hype is not about growth, but rather about hope:

Source: Ycharts

Polaris benefits more from a PE expansion than a growing business. Although investors tend to forget, there were still many recalls in 2017 and I’m not convinced Polaris is done dealing with its quality issues.

Polaris Industries has increased its dividends for 22 consecutive years. This make it part of the elite Dividend Achievers list. The Dividend Achievers Index refers to all public companies that have successfully increased their dividend payments for at least ten consecutive years. At the time of writing this article, there were 265 companies that achieved this milestone.

Based on its strong dividend growth history, I was willing to give PII a second chance. I then used the dividend discount model to find its fair value. I’ve been more than generous with dividend growth rates of 8% and 7% and I still can’t get a value that makes sense with today’s price:

Input Descriptions for 15-Cell Matrix

INPUTS

Enter Recent Annual Dividend Payment:

$ 2.32

Enter Expected Dividend Growth Rate Years 1-10:

8.00%

Enter Expected Terminal Dividend Growth Rate:

7.00%

Enter Discount Rate:

10.00%

Discount Rate (Horizontal)

Margin of Safety

9.00%

10.00%

11.00%

20% Premium

$ 162.30

$ 107.85

$ 80.64

10% Premium

$ 148.78

$ 98.86

$ 73.92

Intrinsic Value

$ 135.25

$ 89.88

$ 67.20

10% Discount

$ 121.73

$ 80.89

$ 60.48

20% Discount

$ 108.20

$ 71.90

$ 53.76

I understand that I would have gotten a better valuation if I had used a 9% discount rate but this just seems wrong considering the numerous issues Polaris just went through with the quality of its 4wd. The company may turn around and achieve more success with its motorcycle business. However, if I were a shareholder, I would take the 50% gain this year and run.

Final Thought

There have been many major reactions towards earnings over the past 2 weeks. We have seen several companies going up or down by 10% or more. In both cases, I think investors are over reacting. A single quarter won’t change the entire business and doesn’t justify such fluctuations. However, it creates buying and selling opportunities for some.

Disclaimer: I do not hold T, IBM or PII in my DividendStocksRock portfolios.

If you like my analysis, click on FOLLOW at the top of the article near my name. That will allow my articles to display on your homepage as they are published.

Additional disclosure: The opinions and the strategies of the author are not intended to ever be a recommendation to buy or sell a security. The strategy the author uses has worked for him and it is for you to decide if it could benefit your financial future. Please remember to do your own research and know your risk tolerance.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Tech

Facebook says will make ads more transparent

(Reuters) – Facebook said on Friday it will make advertising on its social network more transparent and ask for documentation from advertisers, especially for political and election-related ads.

FILE PHOTO: Facebook logo is seen at a start-up companies gathering at Paris’ Station F in Paris, France on January 17, 2017. REUTERS/Philippe Wojazer/File Photo

Advertisers will be required to include a disclosure in their election-related ads, which will read: “Paid for by,” Facebook said.

Reporting by Laharee Chatterjee in Bengaluru; Editing by Sai Sachin Ravikumar

Our Standards:The Thomson Reuters Trust Principles.

Tech

Telecom Italia Chairman says network 'strategic', talking with Italy government: paper

MILAN (Reuters) – Telecom Italia’s (TIM) fixed-line network is a strategic asset and the group is examining the dossier with the national government to find a shared solution, chairman Arnaud De Puyfontaine said in a daily on Friday.

Vivendi’s Chief Executive Arnaud de Puyfontaine attends the company’s shareholders meeting in Paris, France, April 25, 2017. REUTERS/Jean-Paul Pelissier

“For us the network is strategic,” De Puyfontaine said in an interview to la Repubblica, adding a separation of the network could make sense to create an even more neutral platform for all companies and reduce the digital gap in the country.

“(CEO Amos) Genish and I are working on this front with pragmatism. We understand the national interest, we will examine the dossier with the government: the important issue is to meet the interest of all stakeholders,” he said.

De Puyfontaine added that it was “premature” to discuss the possibility of new shareholders joining the backbone network, amid speculation that state holding Cassa Depositi e Prestiti could take a stake if the network is spun off.

Asked whether competition between Telecom Italian and rival Open Fiber to roll out ultra-fast broadband was damaging, he said competition was always a good thing.

The chairman added that French media group Vivendi was in talks with private broadcaster Mediaset to resolve a legal dispute between the two groups.

Reporting by Giulia Segreti, editing by Stephen Jewkes

Our Standards:The Thomson Reuters Trust Principles.

Tech

Equifax Ignored Warning of Breach, Says Researcher

Bad to worse.

A security researcher claims to have warned Equifax of major vulnerabilities to its computer systems last December. If true, this contradicts the company’s claim to have only learned about the problems this spring—and provides more evidence Equifax could have prevented a catastrophic data breach that affected at least 145 million Americans.

The new allegations, reported by a security reporter at tech news site Motherboard, say the unnamed researcher scanned servers and public-facing websites, and discovered it was easy to access troves of personal data of Equifax customers.

In at least one case, a website that appeared to be an internal employee portal for looking up customer information could be accessed by anyone on the Internet. Overall, the security vulnerabilities appeared to have offered easy access to a staggering amount of sensitive data:

[T]he researcher couldn’t believe what they had found. One particular website allowed them to access the personal data of every American, including social security numbers, full names, birthdates, and city and state of residence

The researcher, who asked for anonymity out of “professional concerns,” claims to have told Equifax about the vulnerabilities immediately after discovering them, and urged it to take down exposed websites, but says the company failed to act.

These allegations, if accurate, reinforce indications that Equifax—which has a significant business selling data protection tools—was shockingly negligent and incompetent when it came to security. Earlier accounts of the breach have already indicated that hackers got in because the company failed to update its software, which should be standard practice for any corporation, and especially for those who handle sensitive consumer data.

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As Motherboard notes, all of this also suggests that the gaping security holes could have been exploited repeated by multiple hackers.

“If it took me three hours to find that website, I definitely think I’m not the only one who found it. It wasn’t just one breach. It was maybe dozens,” the researcher claimed.

Equifax has yet to provide a public response to the new allegations, beyond saying the company doesn’t comment on “internal security operations.”

Equifax is currently facing dozens of lawsuits over the data breach from consumer class action attorneys and from state and city governments. The new allegations are likely to provide the plaintiffs with new ammunition to obtain damages. As Fortune has reported, the Equifax hacking incident is likely to differ from earlier mass data breaches in that the company could pay out real money to the consumers affected.

Tech

Hydrogen fuel-cell car push 'dumb'? Toyota makes a case for the Mirai

TOKYO (Reuters) – Having invested heavily in hydrogen, a technology derided by Tesla chief Elon Musk as “incredibly dumb”, Toyota Motor Corp is making a renewed push for fuel cell cars to fill a role in a future dominated by electric battery vehicles.

FILE PHOTO – The Toyota Mirai, an hydrogen fuel cell vehicle, is displayed on media day at the Paris auto show, in Paris, France, September 29, 2016. REUTERS/Benoit Tessier/File Photo

Japan’s biggest automaker believes both technologies – all-electric battery cars like the Tesla Model X on one hand and Toyota’s hydrogen Mirai on the other – will be needed to fully usurp gasoline cars. 

“We don’t really see an adversary ‘zero-sum’ relationship between the EV (electric vehicle) and the hydrogen car,” Toyota chairman Takeshi Uchiyamada told Reuters ahead of the Tokyo auto show. “We’re not about to give up on hydrogen electric fuel-cell technology at all.”

Toyota began pitching its fuel-cell car as a mainstream gasoline car alternative in 2014 when it launched the Mirai with a price tag of 7.24 million yen – almost $ 70,000 at the time.

The car has since been launched in the United States and other countries around the world. But initial excitement has faded as major markets including China and Europe have tilted heavily toward electric vehicles.

Just 4,300 Mirais have been sold, compared to around 4 million units of the Prius, Toyota’s blockbuster hybrid that ushered in the age of the EV.

Uchiyamada, who is known as the “father of the Prius”, says Toyota isn’t anti-EV and is investing heavily in technologies such all solid-state lithium-ion batteries to make them more desirable.

But it also sees some advantages for hydrogen cars, which are propelled by electricity generated by fuel cells.

One major issue facing EVs is the length of time they take to charge – up to 18 hours in some cases – and a problem being amplified as automakers pack in more batteries to extend range.

Rapid charging technology is helping to solve this issue. But a 30- to 40-minute wait is still too long for many ordinary drivers with busy lives, says Yoshikazu Tanaka, the chief engineer in charge of Toyota’s Mirai.

What’s worse, rapid charging when used too often compromises battery life significantly, he and other engineers say.

While a hydrogen car can refuel in under five minutes, the high cost of the technology and a lack of refuelling stations is a problem, something Toyota has been focused on addressing.

The company has joined forces in Japan with rivals Nissan Motor Co and Honda Motor Co, and with energy companies such as JXTG Nippon Oil & Energy to build a network of refuelling stations that now totals 91.

FILE PHOTO – The Toyota Mirai, Toyota Motor Corporation’s first commercially available, mid-sized hydrogen fuel cell sedan, is seen at a press preview in Newport Beach, California, November 17, 2014. REUTERS/Lucy Nicholson/File Photo

Tanaka also wants to significantly extend the car’s driving range to compensate for the lack of fuelling stations.

While still at the concept stage, Tanaka wants to raise the “practical driving range” of the Mirai to about 500 km (310 miles) from the current 350-400 km (190-250 miles). A fuel cell car’s practical range usually dips to 65-70 percent of its “sticker” range – 650 km for the Mirai – because drivers often use air-conditioning and accelerate with abandon.

Making the fuel cell system more efficient and trying to gain more propulsion power from a given amount of hydrogen will be key, Tanaka said. He also wants to package the vehicle more efficiently to gain more storage space for larger fuel tanks.

CHINA HOPES

Toyota says one of the most promising markets for hydrogen cars is China – a key advocate of electric cars but one which is beginning to embrace fuel-cell technology as well.

Last month, Shanghai announced plans to promote development of fuel-cell vehicles by adding hydrogen refueling stations, subsidizing companies developing fuel-cell technologies and setting up R&D facilities. The city’s goal is to put 20,000 hydrogen fuel-cell passenger vehicles and 10,000 commercial vehicles on the road by 2025.

”Chinese policymakers visit us and we visit them frequently” to discuss Toyota’s hydrogen fuel-cell technology, says Katsuhiko Hirose, a green tech engineer at Toyota. 

Toyota was set to test hydrogen fuel-cell cars in China this month as part of an effort to determine the feasibility of selling the Mirai there.

But it’s not all just about cars.

In an effort to encourage other industries to use hydrogen, Toyota and Air Liquide S.A. helped set up the Hydrogen Council, a global lobby launched in January on the sidelines of the World Economic Forum in Davos.

With 27 members including automakers Audi, BMW, Daimler, Honda, Hyundai, and energy companies such as Shell and Total, the Hydrogen Council has lobbying policymakers and investors on hydrogen.

The council’s main argument is that electricity supplies can be limited and unstable in high demand. That’s because power grids have small buffers as electricity cannot be stored easily and transported. Large-scale adoption of hydrogen can solve that issue, said Toyota’s Uchiyamada, who is also co-chair of the Hydrogen Council. 

Electricity generated during the night, which usually goes to waste when unused, and electricity generated by solar and windmills can be stored and easily transported as liquid hydrogen, much like gasoline.

“Elon Musk is right – it’s better to charge the electric car directly by plugging in,” said Tanaka. But hydrogen has a place as a viable alternative to gasoline, he added.

Reporting by Norihiko Shirouzu; Editing by Lincoln Feast

Our Standards:The Thomson Reuters Trust Principles.

Tech

Three women sue Uber in San Francisco claiming unequal pay, benefits

SAN FRANCISCO (Reuters) – Three women engineers have sued Uber Technologies Inc [UBER.UL] for discrimination based of their gender and race, the latest blow to the ride-services company that is straining to overcome a year of controversies over its workplace culture.

FILE PHOTO: A man arrives at the Uber offices in Queens, New York, U.S., February 2, 2017. REUTERS/Brendan McDermid/File Photo

The lawsuit, filed Tuesday at the Superior Court in San Francisco, follows a widely read blog post in February from another female engineer that described Uber’s work environment as one that tolerated and fostered sexual harassment.

The lawsuit filed by Ingrid Avendano, Roxana del Toro Lopez and Ana Medina, who described themselves as Latina software engineers, says that Uber’s compensation and other practices discriminate against women and people of color. As a result, the three women have lost out on earnings, promotions and benefits, the lawsuit says.

Avendano and Toro Lopez left Uber this summer after more than two years with the company. Medina is still employed there, according to the lawsuit.

Uber spokesman Matthew Wing declined to comment.

The lawsuit describes an employee ranking system that is “not based on valid and reliable performance measures” and favors men and white or Asian employees. Women, Latino, American Indian and African American employees are given lower performance scores, making it more difficult for them to advance professionally and confining them to more menial tasks, according to the lawsuit.

“In this system, female employees and employees of color are systematically undervalued compared to their male and white or Asian American peers,” the lawsuit says.

Women, black and Latino employees also lose out on pay raises, bonuses, stock options, benefits and other wages because of the company’s discriminatory practices, the lawsuit alleges.

“These three engineers are seeking to ensure that Uber pays women and people of color equally for the hard work they’ve done – and will continue to do – to help make Uber successful,” said lawyer Jahan Sagafi of Outten & Golden which is representing the plaintiffs. 

Outten & Golden have also represented employees in gender discrimination lawsuits against Goldman Sachs and Microsoft Corp (MSFT.O).

Avendano and Toro Lopez brought their complaints to the California Labor and Workforce Development Agency this summer, an administrative step that precedes a public lawsuit. News site The Information reported on the complaint Tuesday.

In August, Uber made a series of changes to address pay equity, including increasing pay of employees who were paid below the median salary for their job and providing an annual 2.5 percent raise.

Reporting by Heather Somerville; Editing by Cynthia Osterman

Our Standards:The Thomson Reuters Trust Principles.

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Apple acquires New Zealand wireless charging company

SINGAPORE (Reuters) – Apple, which recently said it was including wireless charging in its latest iPhone X and iPhone 8 smartphones, has acquired New Zealand firm PowerbyProxi that designs wireless power products for consumers and industry. 

A broken iPhone is seen in this illustration picture, October 21, 2017. REUTERS/Kacper Pempel

An Apple spokesman confirmed the acquisition, which was earlier reported in New Zealand media. Both companies declined to provide details of the purchase.

Wireless charging allows users to recharge devices by placing them on a pad or other surface rather than inserting them in a cradle or attaching a cable.

Apple has been slow to adopt the technology, lagging behind its biggest rival Samsung Electronics Co Ltd and other mobile phone companies that have offered wireless charging in some of their devices for several years.

Apple joined the industry body that develops the Qi wireless charging standard, the Wireless Power Consortium, in February. The iPhone 8 and X both support the standard.

Apple’s interest in PowerbyProxi may be driven by the latter’s other products, some of which can support transferring up to 150 watts through any non-metallic material, for wirelessly charging industrial machinery and medical equipment, said Jake Saunders, Asia Pacific vice president of ABI Research.

This could allow Apple to offer much larger pads that could quickly charge multiple consumer devices, including laptops and even electric scooters, he added. 

For consumers, charging a single device on one pad may not be that appealing, “but when you get into multiple device charging it starts to get attractive”, Saunders said. 

Apple recently announced its own AirPower accessory which it said would simultaneously charge up to three devices, including new versions of the Apple Watch, iPhone and AirPod charging case. 

PowerbyProxi was founded in 2007 as a spin-out of the University of Auckland. Samsung Ventures, global investment arm of Samsung Group, invested $ 4 million in the company in 2013. 

PowerbyProxi will continue its “growth in Auckland and contribute to the great innovation in wireless charging coming out of New Zealand”, its founder and CEO, Fady Mishriki, said in a statement.

Reporting By Jeremy Wagstaff; Editing by Himani Sarkar

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This Is the Board Room, Not the Bedroom

#Metoo. Sexual harassment, unwanted advances, inappropriate comments, the list goes on. It doesn’t just happen in Hollywood, it happens in every industry–in companies large and small, and not always in a hush-hush manner. 

A very high-powered C-suite executive at a company we once worked with behaved inappropriately with me. Every time he attended the meetings to see new product lines, he would make comments about how beautiful/sexy I was. He did not do this behind closed doors, but rather in front of his own employees–and in front of mine (all this in spite of being a married man). 

While his comments were clearly misplaced, I chose to never let them affect the businessperson, leader, or woman I consider myself to be. His ridiculous banter only served to give me a clear roadmap as to how to sell more to the company this man represented.  Every time he came to a meeting, I was dressed in my womanly best–by that, I mean clothes I liked, which made me feel beautiful and highlighted the things I find attractive about myself.

I knew what he was about and I had no qualms about using his unwanted overtures against him in the most productive way possible: by goading him into spending more of his company’s money each time he came to see us. And every time, my women account reps would roll their eyes and get irritated with the way he had behaved–until, finally, a woman who had witnessed his meaningless advances wondered aloud, after he left, how I could stand it.

I gave her this piece of advice: When you get a man dumb enough to base his purchasing decisions on his nether regions, rather than on higher reason and true merit, I find getting up in arms about it is a total waste of time. His ridiculous repartee does not reduce me in any way, because I take it as a reflection of his own reduced intelligence.  It signals that his wallet is located in his pants as well, and I exact retribution for each and every lewd comment he makes.  I make him pay the price for his poor judgement. I take his money. I take it over and over again. And I laugh all the way to the bank–knowing that he is the one making a fool of himself, causing others not to take him seriously, to titter behind his back, and to view him as a liability.

While there is clearly a firm line between making comments about women and actually physically assaulting them, I have found that as a woman, I have been best served by refusing to be victimized by the kind of men who make comments like those we’ve heard coming from the mouths of everyone from Trump to Weinstein, and more importantly people we have likely all come into contact with at one point or another in our careers as women, like the man-boy I mentioned above.  And refusing to be victimized in my mind, means one thing, and one thing only: beat these worthless specimens where it matters–not in putting off their verbal advances, but in surreptitiously controlling them with their own behavior.

The guy that I mentioned above, despite his executive title, was merely a hired gun at his company. I own mine. He no longer holds his position–but 13 years later I am still in charge at mine. He and his foul mouth have faded from the spotlight, right back into the shadows of the gutter where they belong.

Tech

Toshiba weighing options in case chip unit sale not completed by March

CHIBA CITY, Japan (Reuters) – Toshiba Corp (6502.T) said it is considering various measures in case the $ 18 billion sale of its chip unit does not close by the end of the financial year and leaves the embattled conglomerate short of funds needed to ensure it stays listed.

FILE PHOTO: The logo of Toshiba is seen as a shareholder arrives at Toshiba’s extraordinary shareholders meeting in Chiba, Japan March 30, 2017. REUTERS/Toru Hanai/File Photo

The deal needs to close by end-March or Toshiba will likely report negative net worth – where liabilities exceed assets – for a second year running. That could trigger an automatic delisting from the Tokyo Stock Exchange.

“Nothing has been decided, but it’s true that we are considering potential measures,” CEO Satoshi Tsunakawa said at an extraordinary general meeting where shareholders approved the sale to a consortium led by Bain Capital LP.

Proceeds from the sale are crucial to cover billions of dollars in liabilities arising from the conglomerate’s now bankrupt U.S. nuclear unit Westinghouse.

But a deal was only agreed last month after a long and contentious auction, and chances are high that it will not receive regulatory approvals by end-March as such reviews usually take at least six months.

Tsunakawa did not elaborate on what measures Toshiba may take but his comments follow the Tokyo Stock Exchange’s decision this month to remove the firm from a special watchlist which had prevented it from issuing new shares on the market.

Analysts believe, however, that ordinary investors are unlikely to get behind a firm that lurched from a 2015 accounting scandal to a full-blown financial meltdown last year.

“It may issue preferred shares worth several hundreds of billions of yen to investors such as Bain Capital or it might ask its banks for debt-to-equity swaps,” said Kentaro Harada, a credit analyst at SMBC Nikko Securities.

The sale of the unit – the world’s No. 2 producer of NAND semiconductors – is also facing legal challenges from Toshiba’s chip joint venture partner Western Digital (WDC.O), which opposes any deal without its consent and has sought an injunction with the International Court of Arbitration.

Toshiba said in a statement on Tuesday that it “remains fully determined to resolving the issue through the arbitration process.”

Harada said that if Western Digital did gain an injunction order, that could harm banks’ willingness to provide Toshiba with any further financial support.

In addition to the chip unit sale, shareholders also approved Toshiba’s earnings report for the past business year and the appointment of 10 executives to the board, including Tsunakawa and seven other incumbent board members.

The earnings report has been controversial.

Filed in August after months of delays, it received an unusual “qualified opinion,” or limited endorsement, from Toshiba’s auditor, which said it thought Toshiba was late in booking losses at its Westinghouse unit. Proxy advisory firms Glass Lewis and ISS had recommended this month that Toshiba’s shareholders should not give their approval given the auditor’s mixed review.

Japan’s securities watchdog is also investigating accounting in its earnings report to see if it properly handled losses incurred by its U.S. nuclear unit, a source with knowledge of the matter has said.

Reporting by Makiko Yamazaki; Editing by Edwina Gibbs

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Tech

How You Swipe and Hold Your Phone May Be a Critical Clue to Stop Fraudsters

People are creatures of habit. This applies to daily routines, but also to small details like how they use their phones.

The angle they usually hold their phones as well as how they use the screen to scroll and swipe is often predictable enough to create individual profiles of users’ behavior. And in this data-driven age, it’s no surprise that companies are doing just that by compiling dozens of signals related to consumers’ phone habits in order to create so-called behavioral biometrics that prevent fraud.

The latest example came on Monday when a company called BioCatch announced that it has partnered with Samsung SDS to integrate behavioral biometrics to detect fraud on popular mobile apps.

Frances Zelazny, the vice president of BioCatch, said her company doesn’t only look at swiping or scrolling patterns to verify that someone logging in to, say, a banking app is who they are supposed to be. She says the company also relies on “subconscious decisions” such as the way someone toggles between menu options. BioCatch even introduces “invisible tests”—briefly freezing a phone screen, for instance, to see how someone reacts—as part of its project to map phone users’ behavior.

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Part of what makes this all work is the power of smartphones to act as data-collection devices. For instance, technology like the gyroscope (a component found in every phone) can measure the angle users hold their phones. This in turn provides an additional data point that firms like BioCatch can add to hundreds of other attributes that, when taken together, make up a distinct behavioral profile.

On a practical level, these profiles deter fraud because a crook trying to impersonate a real user will display aberrant behavior—say by swiping in an unfamiliar pattern or by tilting the phone in an unusual way. When such red flags are detected, says Zelazny, the app will respond by implementing additional security measures.

According to BioCatch and Samsung SDS, the combination of behavioral biometrics and other new forms of phone-based ID verification (such as fingerprint and, in Apple’s new iPhone X, facial recognition) will eventually replace the password as a form of security.

The introduction of behavioral biometrics is also part of a larger initiative backed by the FIDO Alliance—a group of companies that include Samsung, Google and RSA, which are working to create strong authentication protocols across different devices.

BioCatch did not state exactly when its behavioral biometrics tools will deployed in the apps consumers use every day. Here are a few additional details from the company’s press release:

BioCatch’s unique technology will be integrated into and complement Nexsign, Samsung SDS’s FIDO-certified, enterprise-grade biometric authentication software. The integration will fill the major security loopholes exposed when seamless interfaces of today’s most popular mobile applications don’t require a user to login multiple times to validate their identity.

BioCatch will use risk-based authentication to continuously monitor Samsung SDS’ users by mapping their behavioral patterns after log-in, to better distinguish between an authorized user, and that of an unauthorized user or an automated BOT or malware.

Tech

Saudi Prince Alwaleed bin Talal optimistic about Twitter investment: CNBC

RIYADH (Reuters) – Saudi Prince Alwaleed bin Talal, who owns investment firm Kingdom Holding, said in an interview with CNBC on Monday that he was optimistic about his investment in Twitter.

FILE PHOTO: Saudi Arabian Prince Al-Waleed bin Talal arrives at the Elysee palace in Paris, France, to attend a meeting with French President, September 8 , 2016. REUTERS/Philippe Wojazer

“It’s not going to be easy because they face some difficulties, but our entry point was very reasonable, so right now it’s holding on a breakeven point,” he said.

Reporting by Katie Paul; Editing by David Goodman

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Tech

JPMorgan partners with data start-up to boost fixed-income trading

NEW YORK (Reuters) – JPMorgan Chase & Co has partnered with data analytics start-up Mosaic Smart Data to help its fixed-income sales and trading business become more profitable.

A view of the exterior of the JP Morgan Chase & Co. corporate headquarters in New York City May 20, 2015. REUTERS/Mike Segar/Files

The bank, whose fixed-income trading revenue slumped last quarter, has signed a multi-year deal to use Mosaic Smart Data’s technology division globally, the companies said in a joint statement released on Sunday.

The London-based start-up has developed technology that aggregates and analyzes vast amounts of data from the fixed-income trading division of investment banks to help them make more informed decisions and gain a competitive edge.

That includes helping traders decide which clients to focus on in a given day or enabling management to assess which trader, or trading desk has been performing better.

The partnership underscores the growing demand by banks for technology that can help them gain greater insight from the large quantity of data they produce and store.

“One of the key things the banks are starting to realize is that some of their biggest competitive advantages are locked within their data,” said Matthew Hodgson, Mosaic Smart Data’s founder and chief executive.

Banks are seeking solutions to deal with a liquidity crunch in fixed-income markets. Stricter capital requirements imposed after the 2008 financial crisis have made it more expensive for banks to act as market makers in corporate bonds, leading their fixed-income divisions to slump.

JP Morgan’s fixed-income markets revenue fell 27 percent in the three months ended in September, compared with the same period last year.

Troy Rohrbaugh, global head of macro at JPMorgan, said in a statement that Mosaic Smart Data’s technology could make the bank’s teams “quickly make better informed decisions.”

Mosaic Smart Data is the first company to complete JPMorgan’s “In-Residence” program for fintech start-ups, which was launched in 2016. The program gives young fintech companies support in helping commercialize their products and services.

Hodgson said the idea for the company came from his own experience heading trading at large banks.

“The problem banks face is how do you run your business and understand everything in real time, whether it is research or inventory, and be able to anticipate rather than react to client needs,” he said.

Reporting by Anna Irrera; Editing by Peter Cooney

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