The Internet Of Small Things Spurs Big Business

 

IoT scenarios that appear consumer-centric and disposable hold broad business opportunities.

In a recent InformationWeek column I opined that smart sensors would soon find their way into many disposable products -- like a soda can, which when opened triggers a contest. Initially these won't be very sophisticated, but as sensor prices fall and technologies improve, extreme connectedness across the Internet of Things will inspire new business opportunities.

 

One example is start-up LIFX, based in Melbourne Australia, which has raised $12 million in series-A venture capital funding, for guess what? A lightbulb. Not your standard bulb, but rather a WiFi-enabled, multi-colored, energy-efficient LED smart bulb controlled from a smartphone app.

 

Big deal you might say -- just another gimmicky case of IoT presented in a niche consumer context but with no place in big business, right?

 

Wrong.

 

If the humble light bulb can be managed from a mobile app to control energy output, color, and ambience in the home, then why not apply the same smarts in a commercial setting. Imagine controlling retail store lighting from the touch of an app or changing hue to accentuate products. Want a holiday mood theme for the store or restaurant? Just tap the app -- a simple, cost-efficient way to differentiate your products from something that's pretty much been the same since Edison stumbled upon the light bulb idea.

Beyond light bulbs, we're seeing other IoT applications that appear consumer-centric but have broad business implications. Consider the Nest Labs home thermostat. Nest has no doubt made a tidy sum selling its smart device (40,000 to 50,000 units per month, according to reports), but there are bigger forces at play. It's really more about very smart business than smart technology.

 

An Austin, Texas-based utility company is working with Nest to manage power demand by remotely turning down air conditioning (AC) systems at peak times. On hot days, AC accounts for half of Texas's energy usage and drives up wholesale energy costs. So any mechanism that conserves power is good business. It's also great for the consumer too, with customers offered energy rebates if they allow the company to dial-back AC usage using Nest.

 

Business models like this rely on Internet of Things smarts, but the real value comes because customers buy into an intelligent application and service. Nest, for example, gathers data from sensors (temperature, humidity, and light) together with behavioral consumer analytics that learn residential habits in order to program AC settings automatically. Add the ability to combine weather data and a mobile app and Web portal to control the system and everyone stays cool -- physically, environmentally, and financially.

 

What's apparent from both the LIFX and Nest examples is that applications and services are the real powers behind the Internet of Things. Sensors gather the data (lots of it), but analytics and mobile apps are the secret sauce.

 

Developing these types of apps and services will require smart thinking from technical teams. New business model opportunities will put pressure on development teams to deliver cool new apps to consumers rapidly. But new features will become almost as disposable as the physical products themselves. As such, teams will be continuously adding, testing, refining, and removing functionality to address immediate opportunities, but with the flexibility to pivot when business models change.

 

As IoT makes the consumer-to-commercial crossover, key data acquisition and storage challenges will also need to be reviewed. As yet, smart systems and sensor networks can't process massive amounts of data at the point of capture -- meaning cloud becomes the offload point and intermediary for big data and analytical applications. For businesses, this means addressing persistent cloud security issues and building high-performance networks needed to support a much more diverse set of applications.

 

Apps of course will change too. Today, the smartphone is the focal point for control in many Internet of Things use-cases. But as standards emerge and technologies improve, more intelligence and control will be incorporated within the actual smart-sensor networks themselves.

 

Thinking back to light bulbs, I'm not quite ready to fork out $100 for something I see as disposable, but as a pseudo geek I probably have too much emotional investment in the tech wizardry to throw one away.

 

However, as prices fall and smarts improve, the act of discarding something with more compute power than the Apollo spacecraft will become commonplace. But before things are sent to the scrap pile, smart businesses will have leveraged a new generation of applications to extract every last drop of business value from the IoT tech.

http://www.informationweek.com/strategic-cio/executive-insights-and-innovation/the-internet-of-small-things-spurs-big-business/a/d-id/1279141?_mc=sm_iwk_editor_shaneoneill

Half a cheer for depression's end

 

 

On Friday we will have - depending on how you look at it - either the most symbolically important or the most pointless economic event of recent times.

Namely, official confirmation that the depression caused by the mother of all banking and financial crises is finally over. UK output or GDP has finally exceeded its pre-recession peak (the technical definition of a depression is the period during which GDP remains below that peak).

On the official government stats, GDP fell by 7.2% between its peak in the first quarter of 2008 and its trough in the second quarter of 2009.

Since then recovery has been unusually - some would say lamentably - slow, and national output in the first three months of this year was still 0.6% below that peak.

But that recovery has been picking up considerable momentum over the past year. The UK is now the fastest growing economy of all the world's rich ones.

So in the quarter to the end of June, quarter-on-quarter growth is bound to have been more than 0.6%. The respected National Institute for Economic and Social Research predicts growth of 0.9% in that period.

Which means - hooray hooray hooray - that the depression is officially over, and that we are now once again earning more than we did before the banks got us into our pretty pickle by starving us of credit.

All of which is terribly exciting. And we can expect the Tory chancellor, George Osborne, and his Lib Dem treasury chief secretary, Danny Alexander, to shout from the rooftops that this economic renaissance is all down to their sagacity and tough actions.

Except, as is usually the way with blinkin' economic statistics, it isn't quite as straightforward as that.

For one thing, the Office for National Statistics is in the process of reworking how it calculates GDP. And it has already admitted that the number I gave you above, about how far output fell from its peak between 2008 and 2009, is wrong.

The current officially recorded contraction of GDP exaggerates, a bit, the magnitude of the decline in output. Which implies that the previous peak for output was almost certainly surpassed some time ago - so long, that is, as there aren't significant offsetting revisions to subsequent growth.

Chances are, however, that this terrible depression actually ended some while ago, probably last year. Fingers crossed we will know more about this - I won't say the truth of it (nebulous concept in economics) - in September.

So on Friday we will basically be doing the equivalent of celebrating a World Cup victory that may or may not have actually happened some months earlier.

This could only happen in the wonderful world of economics.

Which brings me to my second and third reasons why you may not need to put out the "Britain is booming again" bunting on Friday.

For one thing, the industrial experience of the past few years has been variegated.

So we are certain that the service industries, which dominate our economy, are already producing more than they did before the great crash, whereas manufacturing is still generating considerably less - 7.6% less in the first quarter of this year, on those questionable official figures.

The vaunted rebalancing of the economy between intangible services and tangible making has not remotely happened - and probably never will.

Perhaps more importantly, it is very unlikely that you personally - yes, I am talking to you - feel any richer than you did at the beginning of 2008.

Because whichever way you cut it, most people remain poorer, largely because the population has increased considerably faster than output has recovered.

 

How much poorer?

Well the acknowledged brainboxes on this are the Institute for Fiscal Studies.

And they say that a year ago real median income - that is adjusted for the impact of inflation - was still 5.8% below its peak for a typical individual (the median calculation) or 8.5% lower on average (the mean assessment).

There are various other ways of cutting these figures, according to which measure of inflation is used or whether housing costs are incorporated.

But the relevant point is that living standards for most British people haven't yet recovered to their pre-crisis levels - and probably won't for two or three years yet.

 

http://www.bbc.co.uk/news/business-28417993

Young hit hardest by recession, says IFS

Young people were hit far harder by the recession than older generations, a report has found.

People aged 22-30 saw their household incomes fall by 13% between 2007 and 2013, while those between 31 and 59 saw a 7% drop, according to the Institute of Fiscal Studies (IFS).

Employment prospects for the under-30s were also hit harder.

Living standards are set to be a key issue in the run-up to next year's general election.

While the government has focused on the economic recovery, the opposition Labour party says living standards have yet to improve for too many people.

 

'Hardest hit'

 

The IFS report, based on government figures part funded by the Joseph Rowntree Foundation, also found that the employment rate among 22-30 year olds over the period fell by 4%, while that among 31-59 year olds remained stable.

The over 60s saw almost no impact on either houshold incomes or employment rate.

"Pay, employment and incomes have all been hit hardest for those in their 20s," said Jonathan Cribb, research economist at the IFS.

"A crucial question is whether this difficult start will do lasting damage to their employment and earnings prospects."

The report also concluded that was "no clear North-South divide" in the impact of the recession. It also noted that home ownership among the young had fallen sharply in recent decades.

Only 21% of people born in the 1980s had bought their own house by the age of 25, compared with 34% of those born in the 70s and 45% of those born in the 60s.

The Treasury said the report showed "just how hard Labour's great recession hit young people and why it's vital we keep working through our long-term economic plan to cut the deficit, create jobs and equip people with the skills they need for the future".

Labour Treasury spokeswoman Catherine McKinnell said: "While David Cameron denies there is a cost of living crisis, these figures show people have seen a substantial fall in their incomes since 2010".

http://www.bbc.co.uk/news/business-28305804 

Robert Prechter on the Bullishness of an EU Breakup and the coming Global Deflation

FTSE rebounds, Shire hits record

 

A man walks past the London Stock Exchange in the City of London October 11, 2013.

Credit: Reuters/Stefan Wermuth

LONDON (Reuters) - UK shares bounced back on Monday after hefty falls last week, with drugmaker Shire hitting an all-time high on a bid offer from U.S. firm AbbVie.
 Shire said it was ready to recommend a new offer from AbbVie, which returned with a fifth bid valuing the London-listed drugmaker at 31.3 billion pounds.

AbbVie, which wants to buy Shire to cut its tax bill and diversify its product line-up, made the offer of 53.20 pounds per share on Sunday after the Dublin-based group asked for an improvement on the previous 51.15-pound-per-share offer.

But traders were cautious.

"What we're doing this morning is basically closing down per client half of the exposure, so we're banking something good on the bounce and leaving the other half on just in case (it climbs to 53)," Galvan's head of trading, Ed Woolfitt, said.

Shire shares rose 2.6 percent to 4,998 pence, with trading volume at 90 percent of its 90-day daily average after about an hour's trade, against the FTSE 100 index on just 6 percent.

The FTSE 100, which dropped 2.6 percent last week to post its biggest weekly drop since March, had climbed 52.13 points, or 0.8 percent, to 6,742.30 points by 0918 BST.

Investors put aside concerns about euro zone banks and looked ahead to corporate earnings, traders said.
"Corporate earnings have started to trend to the upside and momentum indicators suggest we are going to continue to see forward-looking estimates improve alongside EPS estimates," Guardian Stockbrokers' director of trading, Atif Latif, said.

Solid gains were also seen from sports retailer Sports Direct, up 4.4 percent, after it announced plans to launch in Australia and New Zealand by forming a partnership with MySale Group. MySale rose 4.8 percent.

Elsewhere among the risers, Rolls-Royce tacked on 1.4 percent as European planemaker Airbus kicked off the Farnborough Airshow with confirmation it would sell revamped versions of its A330 wide-body jet powered by Rolls-Royce Trent 7000 engines.

http://uk.reuters.com/article/2014/07/14/uk-markets-britain-stocks-idUKKBN0FE0SG20140714

Five Things Rich People Know That You Don’t

California governor signs bill to bring bitcoin and other currency into fold

 

California Governor Jerry Brown announces emergency drought legislation at the CalO ES State Operations Center in Mather, California, February 19, 2014.

Credit: Reuters/Max Whittaker

 

LOS ANGELES (Reuters) - California Governor Jerry Brown on Saturday signed into law a bill that clears away possible state-level obstacles to alternative currencies such as bitcoin.

The legislation repeals what backers said was an outdated California law prohibiting commerce using anything but U.S. currency.

Democratic Assemblyman Roger Dickinson, the bill's author, said earlier this week the bill reflects the popularity of forms of payment already in use in California like bitcoin and that even rewards points from businesses, such as Starbucks Stars, could technically be considered illegal without an update to currency law in the nation's most populous state.

California lawmakers approved the measure on Monday, just days after the failed Tokyo-based bitcoin exchange Mt. Gox received court approval to begin bankruptcy proceedings in the United States as it awaits approval of a settlement with U.S. customers and a sale of its business.

Mt. Gox was once the world's leading exchange for trading the digital currency, but shut its website earlier this year after saying that in a hacking attack it lost some 850,000 bitcoins, worth more than $500 million at current prices. The firm later said it found 200,000 bitcoins.

Brown, a Democrat, in his office's written announcement did not comment on the currency bill he had signed into law along with other legislation.

An analysis of the bill prepared for lawmakers mentions "community currencies", which are created by members of a local area along with participating merchants and are sometimes designed as a protest of U.S. monetary policies, among the forms of alternative payment methods now in use in certain parts of the United States.

The U.S. Marshals Service on Friday auctioned off about 30,000 bitcoins seized during a raid on Silk Road, an Internet black-market bazaar where authorities say illegal drugs and other goods could be bought.

 

http://www.reuters.com/article/2014/06/29/us-usa-california-bitcoin-idUSKBN0F402T20140629

Neil Woodford: my 10 favourite shares

Renowned investor reveals top 10 holdings in his new Woodford Equity Income fund 

 

Neil Woodford's new Woodford Equity Income fund has large holdings in AstraZeneca and GlaxoSmithKline, the drugs makers Photo: Jeff Gilbert

Neil Woodford, Britain's most celebrated fund manager, has announced the top 10 holdings in his new fund, the Woodford Equity Income fund.

The £1.6bn portfolio contains many names familiar to investors in the funds he used to manage at Invesco Perpetual, such as AstraZeneca, which accounts of 8.3pc of the new fund, GlaxoSmithKline (7.1pc of the fund) and British American Tobacco (6.2pc).

Two other tobacco companies, Imperial Tobacco and Reynolds American, also make the top 10, as well as a third drugs maker, Roche. The other top holdings are BT, Rolls-Royce, Capita and Imperial Innovations, which invests in life science and technology companies spun out from top universities including Imperial College London.

Imperial Innovations is by far the smallest company in the Woodford Equity Income top 10, with a market value of about £390m. AstraZeneca, by comparison, has a market value of almost £56bn. Imperial Innovations accounts for 3.6pc of the Woodford fund, which means that the fund owns about 13.5pc of the company.

It is understood that Mr Woodford took advantage of an opportunity to buy Imperial Innovations shares and won't seek to maintain its current weighting as the fund grows. Taking a large stake in a relatively small company is not always possible without causing the price to rise sharply.

Here are the top 10 holdings of the Woodford Equity Income in full.

AstraZeneca 8.3pc

GlaxoSmithKline 7.1pc

British American Tobacco 6.2pc

BT 6pc

Imperial Tobacco 5.3pc

Roche 3.9pc

Imperial Innovations 3.6pc

Reynolds American 3.6pc

Rolls-Royce 3.5pc

Capita 3.4pc

_{Holdings as of June 30}

Woodford Investment Management said it planned to publish a full list of the fund's holdings in a week's time.

Mr Woodford said he had a "cautious" view of the world economy because of the reining in of "quantitative easing" and falling expectations for global economic growth. As a result he was avoiding sectors that he saw as vulnerable.

“My cautious view on the global economy hasn’t changed," he said. "The liquidity flows that have supported asset prices over the past five years are going into reverse, while growth in many parts of the world is being downgraded.

“The global economy and financial markets both face a tricky time over the next few years, but there are still many undervalued assets in equity markets and it is these opportunities that the fund is seeking to exploit."

He added: “I’ve been using a pilot analogy to explain the process of building the portfolio of my new fund. We have taken off and we have already gained a lot of height, but we are not yet at cruising altitude. The portfolio will continue to evolve.

“I have been very careful in building a portfolio that avoids sectors that I believe are vulnerable to a faltering global economy. There is significant emphasis in my new fund on the tobacco and pharmaceutical sectors. These two sectors are resilient to falling demand, have strong balance sheets and attractive valuations." 

http://www.telegraph.co.uk/finance/personalfinance/investing/funds/10950615/Neil-Woodford-portfolio-top-10-my-10-favourite-shares.html 

Current reality of the UK Housing Market

http://telegraph.newsprints.co.uk/view/21892809/pd56436703_matt%20cartoon%20_jpg#.U7mOnBDPBi8.twitter

How To Develop A Trading Brain

"Tradingpsychologie," is a book on trading psychology that was published in Germany in 2012 and was received with great enthusiasm. Many readers and reviewers commented that it was the best book on the subject that they had ever read or that it was the first which was of any real use.

The book's author, Norman Welz, is a psychologist and journalist who developed a keen interest in the stock market and the associated psychology. His specialty is trading psychology, a subject on which he has not only extensive experience but also some unique insights. Among other things, he trains traders to develop their brains in the right direction.

Welz stresses that what differentiates both his work and his book from the vast literature in the field is the emphasis on applied trading psychology. It is common knowledge that traders need discipline, but accepting this idea is simply not enough to enable investors to operate in the appropriate manner.

The essence of the problem is that most people like and need security in all its forms, but "trading is the most insecure business you can be in," Welz says. He argues that no other profession creates so many and such intense emotions and reflects so much of our personalities. He goes so far as to state that stock market activities personify money: "we don't just trade assets and money, we become the money," according to Welz.

To trade effectively, the right mindset is essential. Yet, nothing is harder than divorcing ourselves from the multitude of factors that have created our mindsets in the first place and that dictate how our brains function. We are influenced by parents, family, friends, the environment, society, the media, books and more. By the time we start trading, all of these influences tend to fix trading patterns that are often dysfunctional or suboptimal. Trying to change these patterns is somewhere between difficult and frightening.

It Is Truly All in the Mind
In order to understand Welz's approach, it is necessary to understand the pervasive role of psychology and the brain. While the notion that psychology is vital to the stock market is nothing new, Welz believes that trading is literally 100% psychology. Without a psyche, we could never evaluate financial risk or recognize trends. "No brain, no stock market trading," says Welz. Mental strength is thus absolutely fundamental to trading success. Furthermore, about 95% of our actions are subconscious, and we tend to replicate our behaviors over and over again. All too often, this replication means repeating the wrong or even disastrous courses of action.

To support this contention, Welz refers to a study in which 120 traders were given a system that had proved its intrinsic value statistically in 19 of the last 20 years. After a test year, it was evident that 119 of these traders failed with the system because their mental tendencies led them astray. All but one trader had the wrong mental processes. "Success comes from the head," Welz says. The system was good, but the attitudes and psychology with which the traders applied that system were not.

Why Do Traders Neglect Psychology?
Most traders are men, who tend to think that psychology is not what really matters. They think that what matters, rather, are simplistic notions of being coldly rational, well informed and experienced. According to Welz, however, rationality, information and experience don't help if the brain is not appropriately programmed and tuned. So what can we do to get our minds and subconscious to act appropriately?

Welz's Approach
Norman Welz works on the brains of traders through the subconscious and hypnosis. Trainees are put into a trusting mood and the necessary competences are anchored in subconscious regions of the brain. If this process sounds a bit weird, consider this: For many years, Welz has helped people overcome their fears and blockages, enabling them to win sporting championships and even to secure an Olympic victory. Furthermore, he has helped traders to earn money through activating the right mental energy, motivation and, thus, behavior. He stresses that each person has unique mental bridges and barriers that need to be crossed or overcome in order to ensure success.

"Trading discipline" comes from modifying one's behavior in a desired direction and overcoming the mental resistance and fear that generally get in the way. Particularly in the context of trading, Welz believes that "there are armies of resistance." The trading brain in fact entails an integration of the right investment and market knowledge with the right mental capabilities. It is not that the usual skills are unimportant, it is just that they usually get overridden by the wrong mental and behavioral patterns.

Effective trading thus involves personality modification. According to Welz, "people who are not willing to attempt this should not even bother with trading." Those who concentrate only on the so-called logical aspects of charts and trends, including all those patterns like "flags, triangles and channels or stops and trading ranges," will ultimately flounder on the myriad of emotions that inevitably come into play and even dominate the markets.

The above, explains Welz, is "the ultra-short version" of his theory, but indeed the essence of the matter. Furthermore, he believes that anyone can become a trader and overcome his or her fears. Provided that people are not clinically ill, they can resolve those fundamental anxieties if they are truly willing to work on themselves. In addition, they need a good sense of and grip on reality if success is to result. Of course, financial knowledge and skills, information and research all still play key roles.

However, it is hard work getting there. Welz believes that people shouldn't think they can "start with a mini-account and live from their earnings as a professional trader within six months." It takes time and dedication. Welz believes that if this weren't the case, the roads would be full of Ferraris and Porsches.

The Bottom Line
The fundamental role of trader psychology tends to be underestimated and too much emphasis placed on the technical side. While both are essential, it is arguably the right mindset that differentiates successful from unsuccessful traders. However, learning the technical aspects of trading is more straightforward than acquiring a top-notch trading brain. The latter generally entails working intensely on one's own personality traits and eradicating entrenched behavioral patterns. This process is not easy and requires dedication, time, and often, the aid of a skilled coach. Nevertheless, the results are very likely to reap dividends.

http://www.investopedia.com/articles/basics/13/how-to-develop-trading-brain.asp 

Advisers still suspicious as Dow closes over 17,000

As stocks cross a symbolic threshold, advisers remain ambivalent about a five-year bull market

(Bloomberg News)

A buoyant U.S. jobs report and a reinforced commitment by central bankers to hold interest rates low pushed the Dow Jones Industrial Average over 17,000 for the first time today, providing new energy to a stratospheric bull market that financial advisers are treating with ambivalence.
In an abbreviated pre-holiday session, the Dow closed at 17,067.49, up 0.54% on the day. Both the Nasdaq and the S&P 500 were also up, as investors entered the third quarter with apparently renewed optimism about the strength of a bull market that is now five years old. In that time, the S&P 500 is up nearly 190%.
“The market is on pace for another double-digit gain [this year] — I think that was pretty shocking to people,” John Russel “Rusty” Vanneman, chief investment officer for CLS Investments, said earlier this week. “You would have to think we’re in the last innings of the bull market.”

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The Dow broke through the trading threshold after the U.S. Labor Department said nonfarm employment grew by 288,000 in June and that the unemployment rate fell to 6.1%, its lowest point since September 2008. The S&P 500 was trading around 1985, also a record-high for that stock index, which is up about 8% this year.
What is good news for most is worrisome for financial advisers, who fear that their clients might be too anxious to rush into the market just as it might be peaking.
“Bullish sentiment seems to be a little bit overdone right now,” said Dan McElwee, executive vice president of Ventura Wealth Management. “I’m more concerned about downside [risk] over upside because the market is looking frothy.”
Nonetheless, after years on the sidelines, Mr. McElwee says clients are increasingly looking to put cash into rallying markets.
“Everyone wants 2013 returns in 2014,” Mr. McElwee said, referencing the nearly 30% gain of the S&P 500 last year. “Clients are bringing their checkbooks to invest; they’re not bringing in existing accounts. People are not just getting off the sidelines so we have to caution people about not getting too aggressive when the market seems extended in the short term.”
Adviser E. Michael McGervey said the most common question about the markets he gets from clients is, “How long is the market going to continue to run?”
What they don’t ask about — generally — is something that takes up a lot of Mr. McGervey’s time: how to structure bond portfolios for when interest rates rise.
Central bankers in Europe and the United States reaffirmed their commitment this week to keeping the interest rates they control at historic lows in an effort to stimulate developed economies recovering from the 2008-09 recession.
The issue remains off the radar for Mr. McGervey’s clients until he brings the subject up in meetings.
“You have to remind them that this is not an exercise of trying to time the market — it’s following a rigorous discipline week after week to make sure that we’re staying true to our process,” he said.

http://www.investmentnews.com/article/20140703/FREE/140709971 

FOREX Trading Strategy - 15M Channel Trading +70 pips

My own notes....

Using channels is critical for your success in Trading.  Always keep an eye on the bigger picture, make sure the trend direction is in your favour.  If the trend is going up then look for the entries and go aggressive to the long side.  If a signal is given on the short side and the trend is up, by all means enter the trade but make sure the signal is undeniable and be less aggressive and get out more quickly taking any half decent gains.  If the trend is up and you have entered a long trade you can afford to ride the trade a bit longer.