Facebook has had a tough year with users concerned about privacy and the Cambridge Analytica scandal. Things are beginning to look bright for the company. While the scandal has led to big companies pulling ads off of Facebook, this is being offset by the increase of small companies using Facebook for ads. On top of this, Facebook crushed expectations for Q1 2018: operating income, EPS, and gross PP&E all increased. Furthermore, daily active users reached 1.45 billion, an increase of 13% from last year. Compared to the industry average, Facebook has performed outstandingly. Facebook’s ROA was 22.60% compared to 12.68%, and operating margin was 50.07% compared to 26.93%.
Facebook’s Instagram, with one billion users, is taking aim at Youtube. Their brand new app IGTV (Instagram TV) will allow content creators to broadcast up to one hour long videos, available for viewing on both the IGTV app and the Instagram app. The new Instagram experience looks to capture the magic of Youtube and move it to the mobile sphere where it is easier and more engaging to view. Facebook is also looking to grab some users by Amazon by hopping onto the online gaming wagon. Popular websites such as Twitch and Youtube Live have shown the world that gaming live streams bring in a ton of revenue and users. Facebook has decided to jump in at a chance of a piece of the pie and has launched fb. gg. This new website gives gaming live streamers a home to stream on Facebook, allowing users to follow players and view gaming content. Amazon is a direct competitor to Facebook’s brand new gaming page as they own Twitch which itself already has 962,000 average viewers at any given point. Facebook is growing into areas it never has before IGTV and fb. gg, which the company hopes will increase its revenue: Read More.
Bayesian Inference: From the World Cup To the Financial Market
If you have ever taken a statistics class, you probably learned about Bayes' Theorem which is used to determine conditional probability. This formula helps answer questions such as what is the probability of finding a parking spot given the fact that it is a Saturday? In the real world, the probability of a prior event can not simply be described by a single point. Instead, it can be explained as a probability distribution. We can then progress to Bayesian inference which is the process of generating the posterior probability distribution from the prior probability distribution using Bayes’ theorem. So how can we use these probability distributions?
If you've been in a sports bar in the past few weeks or talked to a big sports fan, you probably realized that the World Cup is going on. Using a set of 412 data points, we can create a normal distribution for conversion rate of goals to shots and use this to determine how good players are and how individual players vary from the mean conversion rate. There are many other applications of Bayes' Theorem, particularly in financial markets. We can generate a distribution for interest rate as well as other inputs, then apply the Bayes’ inference to create a distribution for our prediction. Companies like I Know First even take one step further by applying Bayesian inference into the artificial intelligence model. I Know First’s AI Algorithm take the parameters of different variables as inputs. After applying the Bayes’ inference to the weight of each neuron in the neural network, the Algorithm comes up with the forecast including a signal and a predictability for the market. This allows the algorithm to identify some of the best investment opportunities in the market: Read more.
Twitter Stock Forecast: Social Media Star Rallies As It Enters S&P 500
Twitter has finally posted a profit after 16 quarters of losses following its initial public offering. And not only did it post one quarter of profit, but it has shown strong profits for 2 quarters in a row and expects to be lucrative for the full year. The fact that Twitter has finally begun producing profit as a public company has given investors confidence in the social media star. Twitter has also been selected to replace Monsanto in the prestigious S&P 500 index. Twitter stock price has outpaced all of the other stocks in the S&P 500 except Netflix (NFLX) YTD. Even still, Twitter is still competitive with the streaming giant with gains in 87.68% in comparison to Netflix’s 94.95%.
During the last World Cup Twitter saw increased discussion about the teams competing and the goals scored and hopes to capitalize on this even more in 2018. Thanks to a partnership with Fox Sports, the company will be able to provide nearly real time updates on the games being played. Twitter has been working extremely hard to be a unique platform that will maintain current users while also attracting new ones and video offerings have been one of the key ways Twitter is accomplishing this. On top of the Fox Sports deal, TWTR already has agreements with media companies from Disney to Major League Baseball. Videos allow the use of pre-roll ads which begin playing as soon as the user clicks on an embedded video and these have been one of the drivers of advertisement revenue. As another way to boost engagement, the company has released one of the most comprehensive updates in years which is a revamp to the explore and news section. Now, Twitter will use AI to predict topics relevant to individual users and curate each account’s news and explore sections. Twitter is finally on the upswing after 4 tough years:Read more.
The Future Of Risk Management Part 2: Quantifying Uncertainty
In the first part of our series on the future of risk management, we discussed forecasting liquidity. Now in the second installment, we discuss quantifying uncertainty- something that seems to be paradoxical. First, we must understand uncertainty. Chaotic systems such as the stock market have risk and uncertainty inherently associated with them. Even though we can predict these systems, because of the massive amounts of random events that can potentially occur, it is almost impossible to be 100% accurate. However, it is possible to quantify uncertainty and use these numerical values to minimize risk. There are many different sources of uncertainty that can affect a model such as parameter uncertainty and variability as well as structural uncertainty.
There are many different ways to quantify uncertainty and minimize risk. Sensitivity analysis is the process of recalculating different outcomes based on changes to inputs in order to determine the total change and can be used to determine the outcome of a set of inputs. Another way to simulate the most likely outcome is to use probability weighted averages. If one knows the likelihood of specific situations occurring, an algorithm can run all of these various scenarios and then weigh them based of the probability of that specific event occurring, in a process akin to Bayesian updating. Another more advanced form of the Monte Carlo method is the Morris method, also known as a one-step-at-a-time (OAT) method. In every run, only one input parameter is changed. This way a large number of local changes occurs at different points in the algorithm. Another way to obtain the best possible output and further improve the results from the Monte Carlo method is to use temporal difference learning. This algorithm uses bootstrapping and adapts to create an ideal final outcome instead of a myriad of potential outcomes.
Currently, I Know First is in the process of forecasting ‘what if’ scenarios. Using the stock market data available to the public, the algorithm can identify the larger trends in the stock market and reduce uncertainty regarding the future value of individual companies. Running different scenarios will allow the subscriber to see possible outcomes and minimize risk within their portfolio: Read more
3D Systems Corp Locks in Powerful Partnerships To Positively Shape Future
At first glance, DDD seems to have had a rocky Q1 with a GAAP loss of $0.19 a share, expenses increased by 8%, and cash decreased by 24.78%. With all this being said, 3D Systems is still confident in the future of their company as shown by treasury stock increasing by 141.4% and capital expenditures increasing by 86.34%. 3D Systems had these unfortunate numbers due to their aspirations to expand. The company used more cash and increased their expenses in order to invest in IT, new products, manufacturing, and customer innovation centers. Although earnings now are poor, DDD is willing to invest into their future before recognizing satisfactory earnings. Although stock price initially slumped after Q1 earnings, it has since recovered and grown.
On May 10th, 3D Systems announced a collaboration with Huntington Ingalls Industries’ Newport News Shipbuilding division, the United States largest military shipbuilder. 3D Systems will provide metal additive manufacturing technology to help build naval warships for the U.S. Navy. Huntington Ingalls is the largest ship builder in America, so if this project is successful, it could result in huge opportunities for 3D Systems. In addition to this, on June 12th, 3D Systems announced a partnership with Aquant’s Artificial Intelligence. Aquant uses machine learning to maximize enterprises uptime. 3D Systems is incorporating this AI in hopes of getting customer equipment downtime down to zero. The partnership between these two company is fundamental for 3D Systems if they wish to grow their customer base. With minimization of downtime, 3D Systems will be able to find larger clients who will trust their product and be able to rely on it without a scare of downtime. These partnerships and 3D's emphasis on future growth shows a promising future for the company: Read More.
This past week, I had the opportunity to present about I Know First to a senior delegation visiting Israel from Taiwan. The delegation was focused on bringing Fintech solutions to respective sectors of over 40 of Taiwan’s financial leaders who attended. The delegation was led former Taiwan Minister of Treasury Jye-Chung Lyu and by Ran Yehezkel, economic attaché of Taiwan’s Foreign Trade Administration. During the visit, the delegation got to meet high profile members of the Israeli financial industry such as the Governor of the Bank of Israel and Israel’s Inspector of Banks. Then, local startups including I Know First presented on their company and had a Q&A session. After the presentations, I got to speak personally with many members of the delegation which was very interesting. Many of the visitors were members of the Taiwan Association of Banks which was established in 1983 and is made up of 62 financial institutions including 36 commercial banks, 16 financial holding companies, 2 industrial banks, and other financing companies.
I Know First forayed into the Taiwanese market on December 14, 2017 when the company introduced a new forecast package covering most of the around 800 stocks on the Taiwanese Stock Exchange. The Taiwanese banking sector is a highly protected industry with intense competition. In 2014, regulations were reduced in Taiwan to promote innovation within the domestic financial sector. Hopefully, some of the institutions represented at the delegation are interested in implementing I Know First’s predictive algorithm for their clients. I Know First has been providing forecasts for the majority of the stocks on the Taiwan Stock Exchange. This stock exchange was established in 1981 and now lists over 800 companies with a combined market capitalization above $800 billion. I Know First looks forward to strengthening the new relationships formed with members of the delegation and further expanding our presence in the Asian market, particularly Taiwan.
Warmest Regards, Yaron Golgher, Co-Founder and CEO
COMMODITIES - GOLD - CURRENCIES
Forex Forecast: Returns 73.08% Hit Ratio In 14 Days June 24 |Read More
Gold Prediction: Returns Up To 1.93% In 1 Month June 24 |Read More
Currencies Prediction: Returns 66.67% Hit Ratio In 1 Month June 24 |Read More
Best Currencies: Returns 70.37% Hit Ratio In 3 Days June 21 |Read More
ForEx Forecast: Returns 66.67% Hit Ratio Over 14 Days June 21 |Read More
Commodities & Gold Prediction: Returns Up To .89% In 3 Days June 21 |Read More
The U.S. cotton market has remained stable since its spike in 2011, when China executed its cotton reserving and fiber hoarding plan. It is believed that U.S. cotton demand and price were artificially kept low because there are always worries that China would unexpectedly unleash its cotton stockpile, about half of the global storage. However, U.S. cotton price finally showed a revival in recent days. The ICE July cotton futures closed at 95.21 cents a pound on Tuesday, June 12, the highest level for a front-month future contract in the last 6 years. The revival could be attributed to multiple factors, with an emphasis on the worries about insufficient rain in the cotton-growing areas and the newly issued import quotas from China.
Severe drought kept hitting parts of the Brazos Valley in Texas, the key cotton-growing regions in the U.S. It was reported by the weather service that Brazos County only received 14 inches of rain through June 14 this year, about 2/3 of the amount in the same period last year. Besides, the exceptional amount of rain and potential flash floods caused by the tropical storm Alberto added to the worries about lack of cotton supply this harvest season. Another catalyst is that China has just shifted out from its fiber reserve strategy and moved back to the global cotton market. Signals were shown by the reduction of reserve levels over the past few years and the recently issued report by China’s Ministry of Agriculture and Rural Affairs, stating that there is an expectation of rising cotton imports following insufficient domestic supply of high quality lint. After that, the increased demand of imported cotton was further proved by China’s newly issuance of an extra 800,000 tons of import quotas for private firms.
It is also important to consider the implications of a trade war on the agricultural industry since the tariffs cover all types of agricultural products, including soy, corn, wheat, cotton, beef, pork, fish, vegetables, etc. As a direct result of the escalating tensions, cotton price slipped 2.36% and soy price decreased by 2%.
APPLE STOCK NEWS
Apple News: Company Admits To Faulty MacBook Keyboard June 24 |Read More
Apple News: Apple May Take Hit From Escalating Trade War June 21 |Read More
Apple Snags Media Giant Oprah Winfrey For Streaming Service June 18 |Read More
Apple News: Apple Takes Action to Protect Users' Rights June 17 |Read More
Apple News: As Always Apple Expectations and Stays Different June 6 |Read More
Apple News: What To Expect- WWDC 2018 June 3 |Read More
Apple is thinking about lowering the price of the iPhone when the next version releases. Morgan Stanley analyst Katy Huberty stated that the upcoming iPhone will be at cheaper cost as Apple looks to drop prices by 2%. So, the increase in supply that is already being seen may be for the new iPhone, releasing this September, which the company expects to sell greater quantities than last year.
In recent quarters, Apple has struggled to meet expectations for iPhone sales, so hopefully these lower prices increase demand. Some Apple experts expert the company to release three different base case models with varying features. As we get closer to September and the next iPhone release, more details should arise about what to expect from the new phones and the exact pricing of each model.
