This AMA is meant to be supplemental to my IAC talk: http://www.spacex.com/mars...MUCH MORE
This AMA is meant to be supplemental to my IAC talk: http://www.spacex.com/mars...MUCH MORE
His team has just confirmed and asked me to give you all a heads up.
Do not post your questions in this thread.
This has caught us by surprise just as much as it did anyone else!
To reiterate kn0thing's point, this is not the AMA thread, so questions asked here won't be answered by Elon. Of course, feel free to use this thread to refine your questions first before later asking them in Elon's live AMA thread.
Standard subreddit rules will apply in the AMA thread, and rest assured that we will be removing fluff questions mercilessly. Make sure to research your question before asking it, so that so we're not asking things that have already been answered. In particular, watch the IAC video again; if your question is answered in the Mars Architecture presentation, don't ask it again. Also read through our excellent Community-built FAQ beforehand!
All questions must be about SpaceX. Do not post questions about Tesla Motors, Solar City, or duck-sized horses.
T minus 6 hours until 3 pm PT (22:00 UTC)
The CIA’s abstract art collection isn’t as “secret” as a series of articles made it seem—but it’s more politically significant than it appears, and there are still unanswered questions. Here, photographs of the collection are accessible to the public for the first time.
WASHINGTON, DC — The magazine selection in the visitors’ waiting room at the George Bush Center for Intelligence has a pretty narrow focus: Atop a small wood table sit copies of Hunting Magazine, American Rifleman (cover story: “A Tribute to Antonin Scalia”), and Outdoor Life: The Meat Issue. Near the table, bulletproof glass shields a reception desk. Colonial-era maps of Langley, Virginia hang on the walls next to lists of prohibited things, which include weapons, cameras, cell phones, and “disturbances.” On a rainy Saturday morning, I sat flipping through “The Meat Issue,” waiting to tour the CIA’s collection of abstract art.
In 1968, notorious art collector Vincent Melzac — who was also a catfish farm owner, salon chain magnate, Arabian race horse breeder, and former Corcoran Gallery chief — loaned a series of abstract paintings to the CIA. All were by artists affiliated with the Washington Color School, a post-war movement based in DC, known for their stripes, polka dots, and color fields on canvas. In 1988, the agency purchased 11 of these paintings from Melzac. Eighteen more paintings were loaned in 2000 and then returned to the Melzac Estate last year. The original 11 paintings still hang on the walls of the agency’s headquarters, “represent[ing] an elemental approach to art [and] a swashbuckling donor,” according to a brief blurb on the agency’s website. What these paintings represent about the CIA’s relationship to the art world, though, is more complicated. On these walls, the intersection between US art and politics is especially busy.
The Melzac Collection makes up only a small chunk of the CIA’s eclectic decor. One hallway features the eerie “Intelligence Art Collection,” which “celebrates historical accomplishments in intelligence.” Here, paintings of warplanes resemble action movie concept art, while other works look like Norman Rockwell painted a child’s fantasy about becoming a spy. Official portraits of past CIA directors line another wall. The running theme of most art in the headquarters is that it’s somehow about the CIA. The exception, at first glance, would seem to be the Melzac Collection — these are just a bunch of stripes and polka dots, right? But in historical context, the paintings seem not so different, after all, from those in the Intelligence Art Collection, in that they indirectly “celebrate historical accomplishments in intelligence”— in this case, the CIA’s use of abstract art as a propagandistic Cold War weapon.
In December 2015, a number of media outlets, including Hyperallergic, published articles alleging that the CIA keeps the Melzac Collection “secret.” Headlines in SFGate, CNN, Smithsonian Magazine, Artnet News, and elsewhere offered variations on the same question: “Why Does the CIA Keep Its Art Collection Secret?”
These articles focused on a project by Oregonian artist Joby Barron, called “Acres of Walls.” The project grew out of Barron’s interest in the CIA’s covert promotion of Abstract Expressionism as propaganda during the Cold War. Long held as rumor, it’s now well known that in the 1950s and ‘60s, the CIA helped fund and promote the work of unwitting American Abstract Expressionists — like Jackson Pollock and Willem de Kooning — around the world. Why? Their anarchic artwork was seen as evidence of the extraordinary scope of freedom of expression in the United States. Led by front organizations like the Congress for Cultural Freedom, these efforts were part of the CIA’s Cold War strategy of promoting the non-communist left. In the Soviet Union, it was implied, such avant-garde artists would’ve been thrown in the Lubyanka.
Seven years ago, Barron saw a photograph by artist Taryn Simon of two abstract paintings in a CIA hallway. She began researching the Melzac Collection. Documentation was scarce, she discovered: The CIA’s website has only short blurbs about a few artworks. The only image available online pictured Gene Davis’s “Black Rhythm.”...MUCH MORE
...Why does the CIA have an abstract art collection in the first place? Apparently, it’s not just to brighten up vast empty walls. “[The paintings] are used for training purposes,” Reams said. “We’ll have some of our guys and gals come down here and do a critical analysis of the paintings. Say you’ve got to analyze this big, heavy duty ISIL problem over here — maybe if you come look at the painting, it’ll help you think about how to solve the ISIL problem creatively.”
It sounded like a Homeland parody — Agent Carrie Mathison having a wobbly-chinned eureka moment while gawking at a stripy canvas. How, exactly, this art-related training had played out in the past was “classified information.”...
There were two developments before the weekend that will likely spur a response in the week ahead.
First, while most were looking out for DBRS credit review of Portugal, Fitch surprised by cutting Italy's credit outlook to negative from stable. At the heart of the decision was concern about the repeated delays and back loading of fiscal consolidation. The disappointing growth, the non-performing loan burden, and the political climate pose downside risks.
Italian bonds which had been underperforming Spain bonds had begun holding their own. Last week, the benchmark 10-year bond yield fell 2.5% in Italy but rose slightly in Spain. The divergence was sufficient to change the month-over-month back into Italy's favor (+18.5 bp vs. Spain's +19.7 bp). Fitch noted that even if Renzi does not resign if the referendum fails, the government may be weaker, and parliamentary elections are scheduled for May 2018, and Euro-skeptic political forces are on the rise (5-Star Movement won Rome and Turin in elections earlier this year).
The surprise action by Fitch, coupled with EU demands that Renzi alters the draft budget may weigh on Italian bonds. Italian bank shares rallied for three consecutive weeks, including a sharp 7.3% advance last week. They may also be vulnerable if yields continue to rise. Recall that DBRS put Italy on credit review with negative implications in August. DBRS is the only one of the top four rating agencies that put Italy in the "A" band. A cut would increase the haircut the ECB imposes on Italian bonds used as collateral for loans. The underperformance of Italian bonds relative to Spanish bond may resume if Spain is able to avoid a new election before the end of the year.
Separately, we note that the average of the last 10 referendum polls in Italy with 1000 or more people surveyed was 35.3% supporting the change of the Senate and 41.5% opposed. Most recently, former (unelected) Prime Minister Monti came out last week siding with the No's, as has a wing of Renzi's own party and the leaders of all the opposition parties.
DBRS did not downgrade Portugal's rating or cut the stable outlook. We had thought that at most, the only major rating agency to recognize Portugal as an investment grade credit could have changed the outlook to negative from stable. Investors had been anticipating that the DBRS would do little, if anything in recent weeks, and were encouraged by comments from the Finance Minister. The 10-year yield had fallen from 3.6% on October 7 to 3.14% last week. Below last week's lows, and the yield can move back to 3.00%, where it had seemed to find an equilibrium in August and early-September.
The second development was Canada walked out on the free-trade talks with the EU when a small part of Belgium succeeded in throwing a wrench into the works at the last minute. The agreement required the unanimous consent of all EU countries. Belgium could not commit without all five sub-federal governments and Wallonia objected. Its ultimate objection was over the establishment of new courts to resolve disputes. This is a controversial measure that is in the TPP and TTIP.
While Wallonia's objection is understandably frustrating for Canada, but the walking out by the Canadian delegation, led by Trade Minister Freeland was melodramatic. She is inexperienced in an inexperienced government. The drama does not end the prospects for the deal and leaders are scrambling for a workaround....MORE
It was a great way to mix science with gambling, says Anna Dreber. The year was 2012, and an international group of psychologists had just launched the ‘Reproducibility Project’ — an effort to repeat dozens of psychology experiments to see which held up1. “So we thought it would be fantastic to bet on the outcome,” says Dreber, who leads a team of behavioural economists at the Stockholm School of Economics.
In particular, her team wanted to see whether scientists could make good use of prediction markets: mini Wall Streets in which participants buy and sell ‘shares’ in a future event at a price that reflects their collective wisdom about the chance of the event happening. As a control, Dreber and her colleagues first asked a group of psychologists to estimate the odds of replication for each study on the project’s list. Then the researchers set up a prediction market for each study, and gave the same psychologists US$100 apiece to invest.
When the Reproducibility Project revealed last year that it had been able to replicate fewer than half of the studies examined2, Dreber found that her experts hadn’t done much better than chance with their individual predictions. But working collectively through the markets, they had correctly guessed the outcome 71% of the time3.
Experiments such as this are a testament to the power of prediction markets to turn individuals’ guesses into forecasts of sometimes startling accuracy. That uncanny ability ensures that during every US presidential election, voters avidly follow the standings for their favoured candidates on exchanges such as Betfair and the Iowa Electronic Markets (IEM). But prediction markets are increasingly being used to make forecasts of all kinds, on everything from the outcomes of sporting events to the results of business decisions. Advocates maintain that they allow people to aggregate information without the biases that plague traditional forecasting methods, such as polls or expert analysis.
In science, applications might include giving agencies impartial guidance on the proposals that are most worth funding, helping panels to find a consensus in climate science and other fields or, as Dreber showed, giving researchers a fast and low-cost way to identify the studies that might face problems with replication.
But sceptics point out that prediction markets are far from infallible. “There is a viewpoint among some people that once you set up a market this magic will happen and you’ll get a great prediction no matter what,” says economist Eric Zitzewitz at Dartmouth College in Hanover, New Hampshire. That is not the case: determining the best designs for prediction markets, as well as their limitations, is an area of active research.
Nevertheless, prediction-market supporters argue that even imperfect forecasts can be helpful. “Hearing there’s an 80 or 90% chance of rain will make me take an umbrella,” says Anthony Aguirre, a physicist at the University of California, Santa Cruz. “I think there’s a big space between being able to time travel and physically see what will happen, and then throwing up your hands and saying it’s totally unpredictable.”
The magic of gambling
People have been betting on future events for as long as they have played sports and raced horses. But in the latter half of the nineteenth century, US efforts to set betting odds through marketplace supply and demand became centralized on Wall Street, where wealthy New York City businessmen and entertainers were using informal markets to bet on US elections as far back as 1868. These political betting pools lasted into the 1930s, when they fell victim to factors such as stricter gambling laws and the rise of professional polling. But while they lasted they had an impressive success rate, correctly picking the winners of 11 out of 15 presidential races, and correctly identifying that the remaining 4 contests would have extremely tight margins....MORE
More details have come to light regarding a suspected Old Mastery forgery scandal that may encompass some €200 million ($255 million) in fake canvases. It would appear that some of the world’s foremost experts on authentication have been taken in, casting doubt on connoisseurship and forensic analysis alike.
The most recent development has Sotheby’s refunding the buyer from a 2011 sale of a purported Frans Hals portrait. The authenticity of that painting was called into question because it came from the same source as a Lucas Cranach the Elder Venus, after the latter was seized by French authorities earlier this year under suspicion it was fake. Little-known French collector-turned-dealer Giulano Ruffini, who was the original seller of both works, has brought to market a suspiciously high number of previously undocumented works attributed to Old Masters.
The Hals refund is all the more concerning given how much press the painting received as a newly discovered treasure in the immediate past. In 2008, the Louvre launched a national campaign to buy the canvas for €5 million from Christie’s Paris, declaring it “un trésor national.” The Parisian museum wasn’t acting lightly: the painting had been authenticated after passing a battery of scientific tests conducted by France’s Center for Research and Restoration. At the time, Burlington Magazine called the work “a very important addition to Hals’s oeuvre.”
Though the Louvre’s efforts to secure the work were stymied by the 2008 financial crisis, the painting eventually passed into the hands of London dealer Mark Weiss for just €3 million. He then arranged for a $10 million private sale through Sotheby’s to an American collector—an almost 150 percent profit, the Art Market Monitor points out.
Nevertheless, it now seems clear the Hals painting’s total lack of provenance should have remained a red flag. This year, concerned by evidence against the Cranach, Sotheby’s turned to Orion Analytical, a Williamstown, Massachusetts-based company which investigates artworks and other cultural property, working with law enforcement to unveil forgeries. New tests found traces of synthetic 20th-century materials during its testing of the painting.
“Orion’s peer-reviewed analyses showed the presence of modern materials used in the painting in a way that meant that it could not have been painted in the 17th century,” said Sotheby’s in a statement....MORE
A massive and sustained Internet attack that has caused outages and network congestion today for a large number of Web sites was launched with the help of hacked “Internet of Things” (IoT) devices, such as CCTV video cameras and digital video recorders, new data suggests.
Earlier today cyber criminals began training their attack cannons on Dyn, an Internet infrastructure company that provides critical technology services to some of the Internet’s top destinations. The attack began creating problems for Internet users reaching an array of sites, including Twitter, Amazon, Tumblr, Reddit, Spotify and Netflix.
At first, it was unclear who or what was behind the attack on Dyn. But over the past few hours, at least one computer security firm has come out saying the attack involved Mirai, the same malware strain that was used in the record 620 Gpbs attack on my site last month. At the end September 2016, the hacker responsible for creating the Mirai malware released the source code for it, effectively letting anyone build their own attack army using Mirai.See also Krebs Oct. 19: Spreading the DDoS Disease and Selling the Cure
Mirai scours the Web for IoT devices protected by little more than factory-default usernames and passwords, and then enlists the devices in attacks that hurl junk traffic at an online target until it can no longer accommodate legitimate visitors or users.
According to researchers at security firm Flashpoint, today’s attack was launched at least in part by a Mirai-based botnet. Allison Nixon, director of research at Flashpoint, said the botnet used in today’s ongoing attack is built on the backs of hacked IoT devices — mainly compromised digital video recorders (DVRs) and IP cameras made by a Chinese hi-tech company called XiongMai Technologies. The components that XiongMai makes are sold downstream to vendors who then use it in their own products.
“It’s remarkable that virtually an entire company’s product line has just been turned into a botnet that is now attacking the United States,” Nixon said, noting that Flashpoint hasn’t ruled out the possibility of multiple botnets being involved in the attack on Dyn....MORE
October 20, 2016
Everyone from the C suite to K Street has seen the news of the most recent rounds of DDoS attacks against the likes of Krebs, OVH and others. Widespread cries for BCP 38 are renewed, source address validation everywhere (SAVE) is a hot topic, and talks about a solution centered on reputation based peering are bubbling up. But has anything changed for the internet operator community? Or has the social amplification of risk increased awareness of known faults and gaps in internet infrastructure? The focus of this piece is on attack traffic for which BCP 38 / SAVE are not impactful.
In the trenches
Let’s look at this operationally. An attack happens … now what? You have some logs, network usage metrics and a timeline of alerts from monitoring systems tripped during the attack. As an Authoritative DNS provider, the data we have from an attack often isn’t directly actionable without some cooperation from other recursive resolver operators or amplification honey pots. BCP 38 / SAVE would help remove the need for this step of analysis. These changes are needed because the Internet’s design inherently enables certain kinds of attacks. At the risk of oversimplification, here are some quick characterizations of each kind:
Attacks which focus on web service resource exhaustion can be harder to defend against because the attacker is making requests for resources, often in a manner similar to a normal end user. They connect to your web server and they request the images, html and other resources to render a web page. These attacks are higher risk for the attacking botnet operator as connection to the web server and making resource requests requires a TCP handshake which exposes the IP address of the compromised device. The large population of vulnerable connected devices and ease of exploitation has increased the viability and sustainability of layer 7 HTTP / HTTPS attacks.
More common attacks focus on generating large volumes of data which prevent legitimate data from reaching the targeted end point. These attacks don’t require a large botnet, they only require connectivity to a provider which doesn’t perform source address validation. The lack of source address validation allows requests to be issued seemingly on the behalf of another system and their response is then directed at the unsuspecting device or service. When issuing such a volumetric attack the operator has their choice of protocol DNS, NTP, SSDP, TFTP, even services as benign as TeamSpeak and Valve Source Engine can be used as their responses are larger than the requests made to them. In these scenarios, finding the reflector or issuer of the larger response feels like a waste of time. ShadowServer, DShield, The Open Resolver project and others have made reporting on these sources available for years. So the problem is not accessibility of data, availability of reporting, or awareness of the issue (If you own and operate IP space please sign up for ShadowServer reports to make sure you aren’t facilitating these attacks ) https://www.shadowserver.org/wiki/pmwiki.php/Services/Reports).
The goal of an authoritative DNS exhaustion attack is to remove the protection of the recursive caching layer from the authoritative DNS resolvers. To be effective the attackers wants to have each client request result in an authoritative lookup, ideally placing enough strain on the authoritative resolver that it stops functioning. To do this the client needs to request records which will not appear in the cache of the recursive layer, because if the result isn’t found in the cache the recursive resolver will need to request that value from the authoritative. This cache busting technique is used frequently when collecting DNS real time user measurement (RUM) data. In the case of RUM requests, the goal is to force authoritative resolution to collect timing and performance telemetry. The Mirai botnet, recently in the news for being identified as a source of the attack on Krebs on Security, has an authoritative exhaustion function in its arsenal. This is implemented in Mirai by prepending a pseudorandom 12 character subdomain to the target domain. This leaves the authoritative DNS provider with a fingerprint. At time X machine Y requested a domain with a pseudorandom sub domain. With this information, you can go to the owner/operator of machine Y and inform them that at time X you received a request from machine Y for a domain with a the specified sub domain. They can then tie that request to the machine which asked them about that domain with the sub domain. At that point they know the client IP of the infected system or the outbound IP of a carrier grade NAT.Yes, their analysis of Distributed Denial of Service attacks using the Internet of Things (the attacks on Krebs) was posted less than 24 hours before they themselves were attacked.
However, as the above description outlines, it requires an in-depth logging history for a high volume systems with some potential privacy implications....MORE
21 Oct 2016 at 21:45, Chris Williams
...MOREUpdated Today, a huge army of hijacked internet-connected devices – from security cameras to home routers – turned on their owners and broke a big chunk of the internet.
Compromised machines, following orders from as-yet unknown masterminds, threw huge amounts of junk traffic at servers operated by US-based Dyn, which provides DNS services for websites large and small.
We're told gadgets behind tens of millions of IP addresses were press-ganged into shattering the internet – a lot of them running the Mirai malware, the source code to which is now public so anyone can wield it against targets.
The result: big names including GitHub, Twitter, Reddit, Netflix, AirBnb and so on, were among hundreds of websites rendered inaccessible to millions of people around the world for several hours today.
Dyn tells us it has weathered the storm for now, and services are coming back online. Here's what we know:
- Starting from 1110 UTC, a distributed denial-of-service attack knocked Dyn's DNS nameservers offline. This continued throughout the day in three independent waves as hackers targeted Dyn's data centers one by one, including its US East Coast facility. By 2037 UTC, the situation is said to be under control after mitigations were put in place to block ongoing attacks.
- Dyn is a crucial component in the internet's infrastructure because when you visit a website that uses Dyn's DNS servers, Dyn is supposed to help your browser or app find the right system to connect to. When Dyn does down, your software can't find the website you want to visit.
- A spokesperson for US Homeland Security said the agency is "investigating all potential causes" of the mega-outage.
- Dyn's chief strategy officer Kyle York told The Register by phone that devices behind tens of millions of IP addresses were attacking his company's data centers.
- A lot of this traffic – but not all – is coming from Internet-of-Things devices compromised by the Mirai botnet malware. This software nasty was used to blast the website of cyber-crime blogger Brian Krebs offline in September, and its source code and blueprints have leaked online. That means anyone can set up their own Mirai botnet and pummel systems with an army of hijacked boxes that flood networks with junk packets, drowning out legit traffic....
Twitter, Spotify and Reddit, and a huge swath of other websites were down or screwed up this morning. This was happening as hackers unleashed a large distributed denial of service (DDoS) attack on the servers of Dyn, a major DNS host. It’s probably safe to assume that the two situations are related....MORE
Update 12:28 PM EST: Dyn says it is investigating yet another attack, causing the same massive outages experienced this morning. Based on emails from Gizmodo readers, this new wave of attacks seems to be affecting the West Coast of the United States and Europe. It’s so far unclear how the two attacks are related, but the outages are very similar.
In order to understand how one DDoS attack could take out so many websites, you have to understand how Domain Name Servers (DNS) work. Basically, they act as the Internet’s phone book and facilitate your request to go to a certain webpage and make sure you are taken to the right place. If the DNS provider that handles requests for Twitter is down, well, good luck getting to Twitter. Some websites are coming back for some users, but it doesn’t look like the problem is fully resolved.
Dyn posted this update on its website: “Starting at 11:10 UTC on October 21th-Friday 2016 we began monitoring and mitigating a DDoS attack against our Dyn Managed DNS infrastructure. Some customers may experience increased DNS query latency and delayed zone propagation during this time. Updates will be posted as information becomes available.”
Here’s a list of websites that readers have told us they are having trouble accessing:
Squarespace Customer Sites
Starbucks rewards/gift cards
Wix Customer Sites
New York Times
Elder Scrolls Online
Where synchronization is going to get very interesting is when some critical mass of businesses migrate to cloud computing, say Amazon's Amazon Web Service, and someone takes down AWS.
Unlike the good old days where a computer problem put one company at risk you'll have dozens, hundreds or thousands of companies frozen, all their economic activity halted at the same time.
That's synchronization baby!
Even in the era of index funds, humans have fundamental investing advantages that no machine will ever replace. So says Will Danoff, manager of Fidelity Investments’ $108 billion Contrafund, the biggest actively managed stock or bond mutual fund run by one person.
Since he took over on Sept. 17, 1990, Contrafund has averaged a 12.7% return annually, according to Morningstar, outperforming the S&P 500 index by 2.9 percentage points a year. If you’d invested $10,000 in the fund then, you’d have had $231,207 at the end of last month; the same amount in the S&P 500 would have grown to $118,184.
In that way, Mr. Danoff stands out — the rare big-company fund manager to best the indexes.
Yet, recently, Contrafund has been struggling. For the past five years, the fund has trailed the market by just over half a percentage point annually on average, although it outperformed in 2015 by more than five points.
“For the average active manager, the index has been tough to beat in the last five or six years as central bankers have moved interest rates to extraordinarily low levels,” says Mr. Danoff. “I have managed through these cycles before and believe that experienced active managers will make up a lot of ground quickly when the pendulum swings.”
Mr. Danoff still practices investing largely as an artisanal task. He shows up to a recent interview at Fidelity’s Boston lugging an old notebook that looks as if it has been run through a clothes dryer a few times. In this and other battered notebooks, he has logged ticker symbols and other details from every company he has met with over the past quarter-century — almost 35,000, he reckons. A rumpled page shorn from a legal pad pokes out of his shirt pocket.
Mr. Danoff, 56, was trained by the formidable Peter Lynch, who managed Fidelity’s Magellan fund until 1990. “Peter believed in turning over more rocks than anybody else,” Mr. Danoff says. “The more companies you see, the more opportunities you will find.”
In September, Mr. Danoff says, he spoke with managers from roughly 100 companies, mostly face-to-face. This past week, he says, he met with three billionaire chief executives (no, he won’t name them). “I learn from shrewd executives about their businesses every day,” he says, “and this knowledge will help us make the right long-term investments for our shareholders.”
In his four or five daily meetings with managers, he sponges up insights about their companies and their suppliers, competitors and customers, as well as coming technological changes that could hurt or help a business.
“By casting a wide net, and being flexible and willing to admit and learn from mistakes,” Mr. Danoff says, “active managers at big firms can beat the index over time.” It’s big firms, because not all fund managers command the heft to get such access to top executives.
Andrew Clarke, chief financial officer of C.H. Robinson Worldwide, a transportation and logistics company based in Eden Prairie, Minn., met with Mr. Danoff in January and was “amazed” when he pulled out notes, handwritten on yellow legal pad, from a meeting with Robinson’s management team in 1997, when the company first sold its stock to the public.
“He can see the entire arc of our growth story,” says Mr. Clarke, “because he’s able to go back and see exactly how it’s unfolded.”...MORE
Face drooping: -no, that's just a hang-dog expressionHmmm....this intro seems to be going to a dark place.
Arm weakness: -no, she just through a monitor across the room
Slurred speech: -no, that's the director of customer relations/client retention just returned from a three grand lunch.
Time to call an ambulance: no, time for some rapid-pulse chair aerobics as the algos move faster than even seems possible.
Just because U.S. corporate profit growth has ground to a halt doesn’t mean the impact of earnings announcements in the stock market has diminished. In fact, it’s never been bigger.
Swings such as Alcoa Inc.’s 11 percent plunge last week have become increasingly common since the financial crisis, according to a study by Leuthold Group that looked at how shares reacted in 193,000 instances going back to 1996. The Minneapolis-based fund manager found that earnings-day stock moves exceeding 5 percent doubled in seven years, even as the accuracy of analyst forecasts deteriorated only slightly and market volatility stayed the same.
Some investors pin the trend on the rise of computerized market makers whose hair-trigger algorithms have supplanted the deliberation of their human predecessors. To others, the swings are evidence not of a faster market, but a slower one. They say the likely culprit is the meteoric rise of passive index funds, which fail to appreciate differences among companies and their shares, throwing the process of price discovery out of whack.
“When earnings come out, it’s becoming a rockier road,” said Bill Schultz, who oversees $1.2 billion as chief investment officer of McQueen, Ball & Associates Inc. in Bethlehem, Pennsylvania. “You’re seeing more index-dominated movement and less retail participation in stocks than you have in the past.”
In an earnings season less than a week old, a handful of U.S. companies beyond Alcoa have already seen outsized price swings relative to recent history. On Oct. 13, First Republic Bank slipped 4.1 percent, the biggest post-earnings move since 2014 and almost double the historical average. Hasbro Inc. climbed 8.1 percent on Monday following its report, three percentage points more than the average throughout the bull market.*November 3rd.
Index investments like exchange-traded funds have become an easy target for anyone trying to diagnose market anomalies if for no other reason than their rapid growth. More than $5 trillion is invested in passive strategies tracking stocks today, more than double the $2 trillion of five years ago, data from Morningstar Inc. show.
“With all the money flowing in, people are quick to point the finger at ETFs,” said Eric Balchunas, an ETF analyst with Bloomberg Intelligence. “It’s a relatively new variable on the scene and it gets tagged with a lot of problems. There are a couple of suspects, and maybe ETFs are one of them, but they’re not the only issue.”
While lots of things could contribute to bigger share reactions in the hours after a company discloses results, Leuthold found incomplete evidence in the accuracy of analyst forecasts or overall market volatility. Reported earnings differed from the consensus estimate by 11.3 percent between 2010 and 2016 compared with 9.7 percent from 2004 to 2007, it found, while instances of big moves on non-earnings days were the same....MORE
Not just another pretty face.That's me, quoting myself (NVIDIA Sets New All Time High On Pretty Good Numbers, "Sweeping Artificial Intelligence Adoption" (NVDA))
Or food delivery app.
We don't do public estimates of sales, earnings and guidance, or guesses at market reaction to same, much less on the day of the report.
I'll say this though, even after going through this routine for a lot of years on a lot of names it's still a bit nerve wracking.
The stock is priced for perfection, and has delivered the last three quarters, but personally I'd actually like to see a 20% after-hours whack.Here's how that worked out:
We'll be back after the release. $59.70 up $1.19...
First a heads-up. The technical trading gurus at Investor's Business Daily are saying take profits after Friday's big move, now 20% above their buy point. I don't think so but it all depends on your time frame.Monday, May 16, 2016
And whether you have the discipline to buy back in should the stock not pull back.
(see links below for some of the things driving the stock)
On the other hand it's not like the stock is unknown and there are hordes of naïfs who have yet to discover it. NVDA was the fourth-best performer on NASDAQ in 2015 and through Friday is up 95% in 52 weeks and 60% since the overall market bottomed on Feb. 11....
Nvidia Surges 14% to All-Time High: Street Dazzled by ‘Secular’ OpportunitiesI'll leave it to the reader to identify the gaps in the chart.
For decades, private equity has been one of the most enduring and popular alternative asset classes.
Part of this popularity is surely driven by a perception of high returns and significant alpha across the PE space. That excitement about PE returns was once justified, but a careful look at returns data over the last 10 years suggests that, on average across all funds, PE alpha has largely disappeared. For investors, this leads to two important questions; where did all the alpha go, and do some funds still deliver the goods?
The questions are becoming even more important as the PE space is becoming more democratized. The largest PE funds are now publicly traded, and even the rarified world of venture capital is now open to the mass affluent through new vehicles like the ones offered by SeekingAlpha.
While exact data is hard to get in the PE world, there are a number of studies that have looked at the issue. Yale did a study of buyout PE returns between 1987 and 1998 and found returns of 36% annually versus 17% for the S&P 500. To generate that level of returns, PE funds had to take on significant leverage, but that performance is still impressive. On a beta-adjusted basis, economists have found that PE generated alpha of about 5.5% between 1980 and 2006, based on buyout firm investments having a beta of around 2 and VC fund betas of around 3.
All of the alpha disappeared after 2006. While PE funds have outperformed the market as a whole by roughly 3% over a 30 year period, that superior performance is entirely driven by the early part of the sample. Since 2006, PE returns have been roughly on par with those of the S&P – all without the liquidity, transparency, or low fees of public equity markets. The chart below illustrates this.
David Swensen, chief investment officer of the Yale Endowment perhaps best summed up the challenge concluding “Investors in buyout partnerships received miserable risk-adjusted returns over the past two decades....MOREHT: Alpha Ideas
...“Our American partners lead the world in carrier strike group operations. So we are delighted to be working with the US Navy judge advocate general to help maximise our legal readiness in support of our nation’s return to carrier strike,” said Commodore Andrew Jameson, chief lawyer of the RN, in a canned quote from the MoD....And here come the attorneys, declining a helicopter ride or even a breeches buoy, knowing the sharks will extend professional courtesy:
Last week, Evan Spiegel of Snap Inc. unveiled his first hardware product Spectacles to a few journalists. Wall Street Journal author Seth Stevenson recalls how Spiegel invited him into “a small conference room” where he “draped a towel over a mysterious object sitting on a table” calling Spiegel “eager to the point of jitters”.Perhaps “eager” isn’t the right adjective.So a white-hot, consumer-focused company with a $20-Billion valuation reveals its first-ever spiffy gadget via a cramped conference room… with a towel.What a complete and utter lack of fanfare.What changed in Silicon Valley?Were all the stages and conference halls booked in Palo Alto that day?This is the flagship hardware launch of one of the hottest entities in the valley. Surely they want a buzz around their new device.Yet… no spotlights or smoke machines? No music? No crowd? Not even a black turtleneck?None in sight.Additionally, the product which Spiegel refers to as a “toy” doesn’t seem meaningfully distinguishable from Epiphany Eyewear — video-recording glasses developed by Vergence Labs whom Snapchat acquired in 2014.Tech journalists know that Snap Inc. has been working on a secret project for months, possibly years, all-the-while hiring up all the best electronics and robotics talent in the industry. This massive effort finally culminated to build… a toy?Could the recent press release about Spectacles be an elaborate distraction to take attention off of a more unsavory product?Acquisitions, Hires & a PatentSnapchat may have indicated in a July patent published at the United States Patent and Trademark Office that they have developed facial-recognition device which displays personal information within seconds of a facial scan. The patent details a means of “executing a facial recognition technique against an individual face within the image to obtain a recognized face”.This patent comes after their recent acquisition of Vergence Labs, known for developing Epiphany Eyewear — a product similar to Google Glass, as well as a string of high-profile hires in the consumer electronics industry. These newly-hired hardware specialists reportedly joined a secret research and development lab according to a March article by CNET. Their previous work ranges from wireless-video doorbells, security cameras, robotic Star Wars toys, Google Glass, GoPro, and the Oculus VR headset according to a recent Financial Times article.Also, they reported Snap Inc. was “looking at pretty much every AR startup with computer vision skills” as a target for a possible acquisition.Up until last Saturday, Snapchat still had not publicly announced any plans to develop hardware. It wasn’t teased at all until rumors started circulating. The conclusion was pretty much a slam dunk when Financial Times journalists discovered Snap Inc.’s move to pay and join the Bluetooth consortium which they called a “clear signal of intent” to develop hardware.So, if press about their secret operation was the catalyst for them to pass off Spectacles’ 2-year-old product as something new, what is it that they’re really working on?Gathering Facial Profiles With “Lenses” Feature?In order to use the silly-cartoon-face-making “Lenses” feature on Snapchat, the interface instructs the user to tap on their face which initiates a facial scan. This captures the user’s face for a seemingly-temporary period so they can apply silly dog ears and rainbow barf to their heart’s content and send it to their friends.
How “Lenses” Could Train a System to Recognize a FaceAdam Geitgey’s Medium article Modern Face Recognition with Deep Learning explains how accurate facial recognition relies on a system’s ability to “pick out unique features of the face that you can use to tell it apart from other people — like how big the eyes are, how long the face is, etc”. And the system must also be able to “compare the unique features of that face to all the people you already know to determine the person’s name.”One method of face recognition is to program a system to compare measurements of obvious facial landmarks like the outside edges of eyes or top-of-the-chin to mouth etc. but the most accurate way for a system to reliably recognize a face is to let it decide which measurements matter most by feeding it millions of faces.Determining these mysterious measurements is resource-intensive but highly accurate. Luckily, services like OpenFace have processed the millions of face images necessary to discover the 128 unique measurements that make for an accurate result. Using a service like this, any 10 different pictures of the same person should give roughly the same measurements.In Machine Learning, capturing these vital 128 facial measurements is called “embedding”. These measurements are unique to almost every human being.To capture a person’s facial signature, an algorithm must first encode their facial features using a method called HOG (Histogram of Oriented Gradients) which outputs a simplified image that is basically a flattened-and-centered set of the subject’s primary facial features. That output is then passed through a neural network that knows which 128 measurements to make and saves them.With our face captured, all the system has to do to identify someone is compare the measurements to those of all the facial measurements captured for other people and figure out which person’s measurements are the closest to find a match....MORE
During the two years of its monthly appearance, this column has looked at many objects—cars, turbines, airplanes, windows, mobile phones, and nuclear reactors—made by humans. Today’s focus is on the human body, specifically the way it keeps itself cool.
Before the development of long-range projectile weaponry some tens of thousands of years ago, in Africa, our ancestors had only two ways to secure meat: by scavenging the leftovers of mightier beasts or by running down their own prey. Humans were able to occupy the second of those ecological niches thanks, in part, to two great advantages of bipedalism.
The first advantage is in how we breathe. A quadruped can take only a single breath per locomotive cycle because its thorax must absorb the impact on the front limbs. We, however, can choose other ratios, and that lets us use energy more flexibly. The second, and greater, advantage is in our extraordinary ability to regulate our body temperature, which allows us to do what lions cannot: to run long and hard in the noonday sun.
It all comes down to sweating. The two large animals we have mainly used for transport perspire profusely, compared to other quadrupeds: In one hour a horse can lose about 100 grams of water per square meter of skin, and a camel can lose up to 250 g/m2. However, a human being can easily shed 500 g/m2, enough to remove 550 to 600 watts’ worth of heat. Peak hourly sweating rates can surpass 2 kilograms per square meter, and the highest reported short-term sweating rate is twice that high.
We are the superstars of sweating, and we need to be. An amateur running the marathon at a slow pace will burn 700 to 800 W, and an experienced marathoner who covers the 42.2 kilometers in 2.5 hours will burn about 1,300 W.And:
And we have another advantage when we lose water: We don’t have to make up the deficit instantly. Humans can tolerate considerable temporary dehydration providing that they make up the deficit within a day or so. In fact, the best marathon runners drink only about 200 milliliters per hour during the race.
Together these advantages allowed our ancestors to become the unrivaled diurnal, high-temperature predator. They could not outsprint an antelope, of course, but during a hot day they could dog its heels until it finally collapsed, exhausted....MORE
This is a marvelously weird apparent prank.
There seems to be an actual entity — it’s registered in Wisconsin — called YNOFACE Holdings Inc, which said in a SEC filing Wednesday that it had acquired more than 4.2 bn shares of Bank of America on September 22, and nearly 800 million shares on August 15 with an exchange of shares.
That’s a lot of shares, and pretty clearly a hoax — though, oddly, the Form 4 filing is still up there. (The purchase of 4.2 billion shares would have cost $66bn. Bank of America’s entire market cap is $171bn.)
As Reuters first reported, the company is run by one Antonio L Lee, who is described on his website as an “American entrepreneur, world renowned artist, and YouTube celebrity specializing in acrylic painting” who is “well known for his work in the field of Scientific and Performance Art”.
Reuters compares the filing to other SEC-filing scams like the fake Avon Products takeover bid, but we think it fits into a colourful trend of oddball regulatory filings meant to make a statement, not a profit.
So far, most of the other such statements have been lobbying efforts under (probable) pen names:
But this statement from YNoFace is a bit more inscrutable and strange than most.
- RT Leuchtkafer, a regular commentator on high-frequency trading who says he’s based in New York. Dark Pools postulates that Leuchtkafer is a nom de plume, since it means “lightning bug” in German. (Get it? Lighting-fast traders? Bugging them?)
- Danny Mulson, who claimed to be an eighth-grader in the nonexistent town of Wetlawn, Oregon.
- Jane Carson, an “80 year old individual investor” based in New York with a uncannily strong grasp of market structure. We were able to find one Jane Carson in the New York area, with an address the Bronx and a disconnected number.
We sent Lee a Facebook message, and got no response. We also called the phone number listed on the company’s Form D filing twice, but couldn’t leave a message because it doesn’t have a voice mailbox. We also left a comment on Lee’s website. We really want to talk to this guy.
Here’s one of the more safe-for-work paintings we found on YNoFace’s Facebook page. It appears to be a dancer and a squirrel, and three children. (Are the children riding the squirrel, or standing behind it? Who can know?)...
There are some paintings about finance as well, as you’d expect:......MORE, so much more.
HT: Matt levine@BloombergViewNot so long ago, Theranos was flying high, its claims that it was upending the medical diagnostics business largely accepted by the public. Behind the scenes, however, some employees were growing wary of those claims, with at least one eventually reaching out to regulators to report the company’s failure to report its questionable test results.A stinging series of articles by the Wall Street Journal soon followed, and in recent months, the government agency that oversees U.S. labs has banned founder and CEO Elizabeth Holmes from operating a blood-testing laboratory for two years, and Theranos has shuttered its clinical labs and wellness centers. To make matters worse, the company was last week slapped with a lawsuit by one of its biggest investors, which claims that Theranos knowingly lied to it.
It’s a nearly ideal scenario for the SEC, which is investigating Theranos and widely expected to use a case against it to expand its mandate into Silicon Valley’s startup ecosystem. The truth is while the SEC has long been viewed as a force in the public markets, it also has the authority to chase after private companies that engage in any “act or omission resulting in fraud or deceit in connection with the purchase or sale of any security.” And lately, Wall Street’s top cop is finding Silicon Valley too high-profile a target to resist.
“If you’re only raising couple million bucks, everyone expects your huffing and puffing,” says one San Francisco-based securities attorney. “But if you’re raising hundreds of millions to billions of dollars, why would the SEC ignore that when they’re auditing the financials of some piddly company that’s raising $50 million in an IPO?”
RHYMIN & STEALIN
In many ways, the startup world has been working toward this moment since 2002, with the passage of Sarbanes-Oxley, a law that established new accounting standards for publicly traded companies. SarBox was designed to safeguard public market investors from the likes of Enron, an energy-trading company that perpetrated one of the biggest accounting frauds in history.
VCs grumbled over the additional expense the new regulation created, calling it a deterrent to going public. Whether or not their claims were valid, the rise of Facebook soon after marked an undeniable shift toward staying private longer. Startup founders admired and looked to emulate Facebook cofounder and CEO Mark Zuckerberg, a then twentysomething who wasn’t answering to anyone, yet growing his company at a nearly unprecedented clip.
Facebook’s private shares similarly seduced accredited investors everywhere. Because of secondary marketplaces that mushroomed around the growing social media giant – the platforms enabled many far-flung participants to trade Facebook’s then-private shares – many who were new to startups were rewarded, and they looked to repeat the scenario.
SO WHAT’CHA WANT
Facebook wasn’t alone in its early ascendance in the Boston area. A year after it was founded in 2004 in Mark Zuckerberg’s Harvard dorm room, a nearby outfit called Y Combinator was being created by entrepreneur Paul Graham and his wife, Jessica Livingston.
It was unlike anything Graham had ever done — and by design. When earlier in his career, Graham cofounded a software company called ViaWeb, few doubted his engineering prowess. But Graham was much weaker when it came to fundraising. In fact, though Yahoo wound up purchasing ViaWeb for $49 million in stock in 1998, it was after being encouraged by a third party to kick the tires a second time.
Y Combinator alums would be different. From nearly the outset, participants in the now-famous accelerator program learned to frame their growth metrics as compellingly as possible. Their pitches proved so irresistible to VCs over time that the mantra of “ramen profitable” gave way to “growth hacking,” which involved burning cash to expand — and figuring out profitability later.
Against the backdrop of these shifts, the SEC’s interest in Silicon Valley was growing. One early, motivating factor was a report in the WSJ in 2006 that questioned whether executives at a variety of healthcare and software companies were manipulating options pricing. Investigations were launched, including into Apple; the SEC even set up a related “Stock Options Task Force” and filed charges against two former Apple execs for their alleged roles in backdating Apple options — both of whom settled without admitting wrongdoing. But the investigations came to be viewed as much ado about nothing, with disagreement even among the government’s experts about how stock options should be issued....MUCH MORE