Tuesday, July 31, 2018

New INC Magazine blog post from Kaplan Institute Exec Director Howard Tullman


Facebook's Face Plant is Just the Opening Act
The tech giants are now trying to come to grips with problems, largely of their own making, that they are unable to solve. Could be time for some adult supervision.

Executive director, Ed Kaplan Family Institute for Innovation and Tech Entrepreneurship, Illinois Institute of Technology @tullman

Every once in a while, even the tech untouchables make mistakes that are so obvious and obnoxious that the world, and even the stock market, is forced to take notice. We're watching a few of these unrecoverable errors take hold right now and slowly leak into the consciousness of the general public. That can't be good news for these companies.

Twitter continues to extinguish millions of fake accounts and discloses that, as a result, its recent apparent growth in users is gossamer. More ominously, this looks more like a race that Twitter will never win because the machines can spawn new bots and fake accounts much more quickly, easily and cost-effectively than the troops at TWTR can swat them away. The situation at Facebook is no better, and probably much worse, because at least the guys at Twitter are trying to address the issues while the frauds at Facebook still largely have their heads in the sand.

I've been a big fan of FB forever, but the romance is finally over. As they lurch stupidly from one crisis to another and offer a continuing stream of lame excuses and amateurish apologies, the youth, insulation and inexperience of the FB management team led by the Zuck is becoming more obvious; and he looks more foolish and out of touch every time he opens his mouth. Anyone who thinks that there's nothing fake about denying the Holocaust is a moron. The Zuck is leading the pack straight into the swamp and taking a well-deserved beating at the same time.

Here's a flash. You don't ever want to be this season's pin cushion or poster boy for arrogance and ignorance when the world starts throwing shade. What we're seeing right now is Schadenfreude on steroids. Ordinarily, seeing the boys get their comeuppance would be somewhat entertaining, but unfortunately, when the big tech guys stumble, the little guys (like us) eventually take it in the shorts.

I expect that the longer-term (and surely negative) financial consequences are just beginning to be felt by the masses in the market and that can't be good news for IRAs or 401(k)s, whether they're stuffed with tech stocks or just holding tracking funds subject to the same downturns. We could be looking at the beginning of the end of the party. The traders are already starting to make their moves and, typically in these cases of rapid and radical downturns, we civilians are always the ones left holding the bag because we can't get out of harm's way fast enough. FB, Netflix (which will likely weather the storm and come back) and TWTR are just the first dominos to fall. (Note: I do not own these stocks.)

I say this with clear understanding that the vast majority of traders don't care about much of anything substantive except stock movement, velocity and volatility. For them, any directional action is apparently equally okay as long as things just keep moving up or down. As Jackson Browne wrote in My Opening Farewell: "there's a train everyday, leaving either way." And, I've also come to realize (no surprise here) that money doesn't really care who makes it and that morals and some basic decency don't really matter much to the market.

When the world gets sufficiently angry, and never mind the fact that these "kids" have been given corporate protections and crazy governance provisions that essentially make them totally secure in their positions, there will come a time and a reckoning when even their clueless and greedy directors can no longer take the heat and will have to make at least some cosmetic changes in the clubhouse. They will need to bring in some grownups.

This actually isn't good news for us or for these stocks because the grownups don't have any idea of how to keep growing these businesses (maybe no one does at this point) and they have even less ability to solve some of the nasty problems and clean up the stuff that's been shoved into various closets. Worse yet, they're going to take their sweet time in doing anything because they don't want to make things worse if that was even possible.

All of which means that there's only one direction for the stock prices of these companies to move for the foreseeable future, and that's further down.  Hanging on to these stocks and hoping for the best is a lot like trying to nail Jell-O to a tree. Even the biggest hammer and the strongest nail won't keep the stuff from ending up in a puddle at your feet.

PUBLISHED ON: JUL 31, 2018


Bootstrapping in America



WATCH THE SHOW HERE: https://www.tastytrade.com/tt/shows/bootstrapping-in-america/episodes/howard-tullman-time-as-a-resource-07-23-2018?utm_source=sumome&utm_medium=facebook&utm_campaign=sumome_share_test

Since we last interviewed Howard, he's been jet-setting, giving speeches, and more! But he's back in the studio to walk through some of his recent observations about society and business. Here are some of the highlights:
  • Recapping his Trader's Expo speech, Howard walks through the impact of technology and how it will influence nearly every industry (which of course influences the market as a whole).
  • We're all "out of control" with our cell phone use. So how do we find a balance between being glued to our phones, checking work emails, etc. and spending quality time away from technology?
  • Time is the scarcest resource in our lives, and the most successful businesses are the ones that will save us time, and Howard predicts that convenience will continue to trump everything.
  • Not every business understand the second sale. You have to help your supporters, and give them "ammo" to get the job done. The best people to do that are your own employees and your own customers. You want employees use personal emails to get the message out/get the message to their customers.
  • The next killer app is going to be voice. The ability to use Amazon's Alexa or similar products to play music, order food, etc is going to continue to spread.
  • Real-time pricing is going to spread as well, in parking, in food, and more.

New INC Magazine Blog Post by Kaplan Institute Exec Director Howard Tullman


The Sad Slide of Truth into the Media Cesspool
What used to be the aim of journalism--presenting the facts--has now become a sideshow in the race for eyeballs, and the bottom.


Executive director, Ed Kaplan Family Institute for Innovation and Tech Entrepreneurship, Illinois Institute of Technology @tullman



I blame Rupert and Fox. They brought yellow journalism back to the U.S. in spades and the "news" hasn't been the same ever since. The media game changed radically and rapidly and even those with the best of intentions had to adapt and adjust or go under. It's a painful race to the bottom of the barrel and a constant struggle to create more useless content to toss into the vacuous vortex. Everyone's obliged to feed the beast. Repurposing and spinning other people's content to keep up is what has been called "churnalism" and it's rampant.

And, if you can't make it, then feel free to fake it. Just this week, a former Fox news analyst claimed that Fox News hosts regularly say things they know to be untrue just for the sake of ratings and notoriety.

Facebook execs, including Mark Zuckerberg, can't figure out why they should bar the Holocaust deniers and the other made-up conspiracy scumbags from their site (and not just the newsfeed) when 99% of their users think the answer is obvious. But then, Zuck isn't about raising the bar-- he's all about the bucks and he sucks. But the saddest part of the FB story is his constant claim that Facebook isn't a media business, which makes its living selling small slices of your attention to advertisers. He says it's just a platform that happens to bring the "news" to billions of people every day. Give me a break, Zuck, and get real.

There was a time not too long ago when there was only one inviolate rule in journalism - the absolute separation between news and opinion. "Everyone is entitled to his own opinion, but not to his own facts" was the way Senator Daniel Patrick Moynihan famously put it, in 1989. If you, as a journalist, followed that simple rule, you could smoke like a chimney and drink like a fish, as long as you made deadline. If your writing style was breathless (as opposed to timeless) and halfway between cheesy and choppy, well that's what editors were for. And, in your haste to beat out your buddies, you could even occasionally get your facts a little messed up.

Of course, getting the facts straight was nowhere near as hard as it is today where the process is equal parts sloppy and intentionally skewed. Getting it right takes a daily and distant backseat to getting it out first and fastest. And, what's even worse, in a social media-centric version of Gresham's Law, fake news today tends to blot out and smother any semblance of legitimate, measured and meticulous reporting. Some 75% of the American public say they can't tell the difference between real news and the fake stuff and more than 50% no longer read or watch any mainstream media. In a democracy, without a common ground and some shared basic facts, it's impossible to have any kind of useful dialogue or discussion. And when the majority tunes out entirely, you're stuck with everyone settling for their own version of their "truth".

It's pretty sad that no one trusts the media any more, but the players don't have to lend its own helping hand to this sleazy slide into the cesspool. Reporters used to pride themselves above all on their independence, their neutrality and their objectivity. The television detective Joe Friday of Dragnet wasn't the only one focused on "just the facts, Ma'am." Writers weren't supposed to inject themselves and their theories, opinions and prejudices into their stories -- that's what editorials were for. The suits sitting in the comfy suites upstairs would write their endless editorials intending to educate and edify us in so many important ways. But the guys and girls running around the city sourcing the stories just told their stories the best and most accurate way they knew how. Short, sweet and to the point. Today's digital media is quite short, but it's rarely sweet, and almost always pointless.

I'm not exactly sure when it started or what caused reporters to think that they were now mind readers and oracles, but practically every news story you read is full of reporters' snide asides, unwarranted observations and gratuitous jabs at somebody. The examples are legion, but it's not worth the time or space to list them. We read that this politician is "trying desperately to shed a certain label" or that another is only supporting certain legislative positions in order to "to position himself for higher office." Or the pieces are stuffed with fake facts, suspect statistics or phony factoids that fit the prejudices and predispositions of the writers.

The media's methods, motives and messages are all under constant attack for increasingly good reasons, but the really sad news is that it's the public's trust in just about anything that's been the most obvious and immediate victim of this wholesale rush to sensation, celebrity and notoriety.  Most current surveys rank media just below politicians and used car salesmen and just a drop above pond scum.

We were also always told that there was an ironclad "Chinese wall" between the guys and girls running around the city sourcing the stories and the people selling ads and space. A sacrosanct separation between reportage and revenues - where craven cash flow considerations never seeped subtly into the deliberations or influenced the sometimes-delicate decisions about when and what the papers would be writing. It feels like the drama and hard calls made around the publication of the Pentagon Papers may have been the industry's high-water mark and that it's been all downhill since then. And, needless to say, back then, misleading and mendacious headlines weren't written with half an eye toward collecting clicks and aggregating eyeballs rather than highlighting critical content.

It's always important to highlight your material and it's still called the newspaper business because you've got to sell news, papers and advertising, and no one doubts that a great headline is still something to be valued and appreciated as it helps to launch the day's papers and websites into the hands of readers. But it never felt quite as slimy and sneaky (and cheap) as it does today-- when it's all about SEOs trying to capture anyone and everyone's attention at any cost, hijacking someone's else's triumphs or tragedies, and driving people from site to site like rats in a maze. Our cellphones may be irradiating our earlobes, but the glut and pace of digital media is turning our brains to mush.

There's no happy ending in sight for these problems. And no easy answers either. It's clear that the media can't fix itself since it's totally hooked on hype, desperate for cash, and constantly competing for clicks. And sadly, none of us has the guts to go cold turkey and try to turn all this noise off because FOMO is almost as prevalent a disease these days as any other form of addiction. So, what can we do in our own businesses to help stem the tide?

Three suggestions. First, focus on what you can control and/or fix. Don't make things worse and don't contribute to the crap. Make it about providing good information for smart decision-making rather than slick selling. Second, when you reach out to customers and clients, say exactly what you mean to do and then do exactly what you said you would. Living well may be the best revenge but living up to your promises and delivering the goods is what makes for lifelong connections and a great business. And finally, make something every day that you can be proud of. Something you can stand by and for, that makes a difference, and that sometime soon, you can point out to your kids and say, "I made this".

Anyone who thinks that the misguided mopes who are writing clever copy, snarky headlines, and "news that no one needs" feel good about themselves or what they're doing is kidding themselves. They may be cynical, but even they aren't that stupid. They know they're just adding trash to the pile. But what they may not know is that when you do something every day that you don't believe in, it takes a little bit of your soul away and a sad soul can kill you quicker than any infection.

Friday, July 20, 2018

WDIS: NEW POSITIONS


This "Where Do I Start?" episode kicks off with a breakdown in stocks that Howard is bullish, bearish and neutral on. But before that, they have to manage a few positions that have moved, including adjusting Microsoft.

WATCH THE SHOW HERE: https://www.tastytrade.com/tt/shows/wdis-top-dogs/episodes/redeploying-capital-with-new-positions-07-20-2018?utm_campaign=archive&utm_medium=link&utm_source=social-share
With the market being up this morning, Tom and Howard continue to take the approach of mixing up strategies.
As they walk through Howard's list of products, Tom explains how the stock's price, option premium, earnings and expiration cycle play a role in determining strategy. Given that the market as a whole has low volatility, Tom and Howard cover multiple debit spreads including Long Verticals and Calendar Spreads. Still, there are some opportunities for Covered Puts, Short Stock and Short Naked Calls.
Tune in to see what strategies Tom and Howard use for each position and how they look at Howard's portfolio overall based on directional risk.

TULLMAN TAKEAWAYS