Investment Themes - Technology

Search all article by their themes/tags in the search area
below for example “Energy” or “Technology”.

Search Results

Found 720 results in Technology
July 27 2015

Commentary by Eoin Treacy

Teva to Buy Allergan Generic-Drug Unit for $40.5 Billion

This article by Chitra Somayaji and David Wainer for Bloomberg may be of interest to subscribers. Here is a section: 

Allergan, which makes the blockbuster wrinkle treatment Botox, said Sunday it would buy the biotech company Naurex Inc., which is developing a fast-acting antidepressant. The $560 million all-cash transaction is expected to close by year-end.

Teva expects its Allergan transaction, which both boards backed unanimously, to close in the first quarter of 2016 and boost earnings per share. Also today, the company raised its earnings per share estimate for 2015 to between $5.15 and $5.40, up from an earlier forecast of $5.05 to $5.35. Earnings per share were $1.43 in the second quarter, Teva said.

Teva had been pursuing a $40.1 billion deal to buy Mylan since April, a merger rejected by Mylan management as culturally unfit. Last week, Mylan’s independent foundation exercised an option to acquire shares that let it control half of the company in a move that rendered Teva’s attempt to win over a majority of its shareholders much more difficult. Abbott Laboratories, Mylan’s top shareholder, in June said it backed Mylan’s plan to avoid being taken over by Teva.

Bloomberg reported on July 25 that Allergan was exploring a breakup of the company, including the possible sale of its generics business.

Mylan is pursuing Dublin-based Perrigo, a campaign that may now get fresh impetus as pressure mounts to become bigger. Perrigo, which makes prescription and over-the-counter drugs, has thus far rebuffed Mylan’s $33 billion offer.

Mylan will continue its pursuit of Perrigo and expects that Mylan shareholders will vote “in the next several weeks” to support a purchase, the company said in a statement. Perrigo shares rose 2.4 percent in premarket trading as of 6:55 a.m. in New York.

Teva, which had accumulated a 4.6 percent stake in Mylan ahead of a potential legal battle, said today it will “review its options” on the holding.

Teva may have a key advantage in integrating Allergan’s generic business because its own head of generics, Siggi Olafsson, formerly led that business at Allergan. Olafsson was brought in to Teva after leaving Actavis Plc, which switched its name to Allergan after agreeing to buy the maker of Botox in November 2014 for $66 billion.

Eoin Treacy's view -

M&A activity both within the pharmaceutical sector and the health insurance sector has accelerated this year and particularly over the last month. Increasing competition to capture market share has been given fresh impetus by the risk that ultra-low borrowing costs might not be on offer indefinitely and that a failure to act now will result in companies becoming targets themselves.  



This section continues in the Subscriber's Area. Back to top
July 27 2015

Commentary by Eoin Treacy

Japan Banks Seen Reporting Gains in Fees, Overseas Lending

This article by Gareth Allan and Shingo Kawamoto for Bloomberg may be of interest to subscribers. Here is a section: 

Prime Minister Shinzo Abe’s efforts to stimulate the economy through monetary easing helped to spur bank lending while also lowering borrowing costs. Loans at city banks have risen for 2 1/2 years, according to the Bank of Japan. The average interest rate on new loans was 0.801 percent in
May, close to a record-low 0.767 percent last August, BOJ data show.

“While domestic lending grew in the first quarter, tighter loan spreads will constrain profit growth,” Yasuhiro Sato, chairman of the Japanese Bankers Association, said at a news briefing on July 16. He expects overseas lending to keep expanding and doesn’t see any change in the direction of interest margins yet.

Overseas Expansion
Sato is also chief executive officer of Mizuho, which said this year that it’s buying North American loans from Royal Bank of Scotland Group Plc for $3.5 billion. Sumitomo Mitsui last month agreed to purchase General Electric Co.’s European buyout- lending unit for about $2.2 billion. Mitsubishi UFJ’s main lending arm is considering acquiring a bank in Indonesia, the Philippines or India, Asia-Pacific CEO Go Watanabe said in an interview last month.

 

Eoin Treacy's view -

Quantitative easing is positive for the banking sector because it creates an incentive to borrow and invest not least among banks themselves. Despite the loss of purchasing power in the Yen, the availability of credit has allowed Japanese banks to invest in their overseas operations which flatter consolidated earnings. This is likely to continue considering the Bank of Japan’s commitment to persistent easing. 



This section continues in the Subscriber's Area. Back to top
July 24 2015

Commentary by Eoin Treacy

The Bacterial Origins of the CRISPR Genome-Editing Revolution

This report by Erik J Sontheimer and Rodolphe Barrangou may be of interest to subscribers. Here is a section: 

Like most of the tools that enable modern life science research, the recent genome-editing revolution has its biological roots in the world of bacteria and archaea. Clustered, regularly interspaced, short palindromic repeats (CRISPR) loci are found in the genomes of many bacteria and most archaea, and underlie an adaptive immune system that protects the host cell against invasive nucleic acids such as viral genomes. In recent years, engineered versions of these systems have enabled efficient DNA targeting in living cells from dozens of species (including humans and other eukaryotes), and the exploitation of the resulting endogenous DNA repair pathways has provided a route to fast, easy, and affordable genome editing. In only three years after RNA-guided DNA cleavage was first harnessed, the ability to edit genomes via simple, userdefined RNA sequences has already revolutionized nearly all areas of biological science. CRISPR-based technologies are now poised to similarly revolutionize many facets of clinical medicine, and even promise to advance the long-term goal of directly editing genomic sequences of patients with inherited disease. In this review, we describe the biological and mechanistic basis for these remarkable immune systems, and how their engineered derivatives are revolutionizing basic and clinical research.

Eoin Treacy's view -

Biotechnology represents a truly exiting story and has real potential to greatly enhance quality of life for millions if not billions of people over the coming decades. However related stocks are somewhat overbought at the present time and potential for mean reversion is looking more likely than not.  



This section continues in the Subscriber's Area. Back to top
July 23 2015

Commentary by Eoin Treacy

New Japanese hotel has robot staff and no room keys

This article by Stu Roberts for GizMag may be of interest to subscribers. Here is a section: 

Robots are deployed at the front desk to help guests check-in and out. According to the Henn-na Hotel, it's possible to hold a conversation with the "warm" and "friendly" robots while they get on with their work. Alternatively, self-service check-in and check-out eliminates the need to go to the front desk or to wait in line.

There are porter robots employed to carry luggage to and from rooms, and cleaning robots employed to keep the hotel spotless of their own accord. There is also a robot employed in the cloak room. Objects up to the size of small bags can be handed over and the robot will put them away in secure lockers. When the belongings are needed, the robot will locate them in the correct locker and hand them back to the guest.

 

Eoin Treacy's view -

This Huffington Post article from more than a year ago highlights how technology that already exists can be combined to displace waiting staff at restaurants. Today’s news that New York has voted to increase fast food wages to $15 following Los Angeles’ decision to raise its minimum wage to $15 earlier this year will only accelerate the incentive for technological integration 



This section continues in the Subscriber's Area. Back to top
July 21 2015

Commentary by Eoin Treacy

There is Hope Beyond Botox as Pharma Races for First Migraine Fix

This article by David Wainer for Bloomberg may be of interest to subscribers. Here is a section:

An early look at the drugs Teva Pharmaceutical Industries Ltd., Amgen Inc., Eli Lilly & Co., and Alder Biopharmaceuticals have developed shows they work for about half of migraine victims tested, snuffing out some of the episodes that wreck their lives. The drugmakers are racing to cash in on a market that analysts say is worth between $4 billion and $8 billion and relieve the recurring spells that cost the U.S. economy an estimated $13 billion a year in lost work productivity.

“There’s very little recognition of the suffering migraine inflicts,” said Cathy Glaser, a 63-year-old patient advocate from New York City who started her own organization to fund research in 2006 because she was frustrated by the lack of relief options.

Glaser as a child recalls seeing her mother take to bed with a cloth over her eyes, and years later found she and her sister were migraine-prone as well. Her daughter suffers from a chronic version that has landed her in the emergency room.  

 

Eoin Treacy's view -

Migraine headaches are an affliction people who do not suffer from them have difficulty understanding but they are no less real. The potential for therapies that can prevent migraines is a great example of how the healthcare sector is capable of delivering solutions that directly enhance productivity. Think of everyone you know and the number of days-off taken because of headaches. If the first solutions on the market only cure half of the people affected the cost of the treatment will be outweighed by the economic benefit on aggregate. 



This section continues in the Subscriber's Area. Back to top
July 15 2015

Commentary by Eoin Treacy

The Five Things Wall Street Wants From the New CFO at Google

This article by Brian Womack for Bloomberg may be of interest to subscribers. Here is a section: 

“Most people aren’t expecting an official number, but they just want to see her talk about it -- that she’s focused on it,” said Robert Peck, an analyst with Suntrust Robinson Humphrey Inc. “It’s not that investors don’t necessarily want spending -- it’s investors want to know it’s being prudently done.”

Pichette had been talking up efforts to be careful with spending, pointing out the company pulled back on underperforming projects such as Google Glass. While operating expenses climbed 21 percent to $6.46 billion in the first quarter, it was less than the increases of more than 30 percent in the previous two periods.

The rate of hiring has slowed as well the past two quarters, even as the total workforce remains at more than 55,000 employees.

Unit Detail
Investors want more transparency around how much each business delivers to the company.

Porat could give more sales numbers around business units such as the video-sharing service YouTube, display advertising, mobile and Google Play, the digital store for buying applications and entertainment content, analysts said. She also could give specifics on the core business: search.

Analysts cited Amazon.com Inc.’s decision earlier this year to break out for the first time how much it makes in its cloud-computing business.

“Here is an easy opportunity for a new CFO to establish a fresh, constructive approach toward the market,” RBC Capital Markets analysts wrote in a note to clients earlier this month.

Eoin Treacy's view -

Google often succeeds in ranking as one of the companies most people would like to work for because it has such an inspiring message of optimism and innovation. However, it is worth remembering that despite forays into an array of additional fields advertising represents more than 90% of earnings. The introduction last year of its C class of shares makes sure that the company’s founders will continue to have wide discretion in how they choose to manage the company and particularly on direct investment in R&D. The performance of the share will depend on the company’s ability to grow profits. 



This section continues in the Subscriber's Area. Back to top
July 13 2015

Commentary by Eoin Treacy

Gene therapy for cystic fibrosis shows encouraging results

This article from Oxford University may be of interest to subscribers. Here is a section: 

Patients who received therapy showed a significant but modest benefit in lung function compared with those receiving a placebo. The trial is the first to show that repeated doses of gene therapy can have a meaningful effect on the disease, and change the lung function of patients. However, the team say more research is needed to improve the effectiveness before the therapy will be suitable for clinical use.

Cystic fibrosis (CF) is the commonest lethal inherited disease in the UK, affecting around 10,000 people nationally and over 90,000 worldwide. Patients' lungs become filled with thick sticky mucus and they are vulnerable to recurrent chest infections, which eventually destroy the lungs.

The trial, conducted in London and Edinburgh, compared the effects of inhaled gene therapy and a placebo on patients with CF aged 12 and over. Lung function was assessed using a common method of measuring the volume of air a patient can forcibly exhale in one second. Over the course of a year, patients were given 12 treatments at monthly intervals. The results, published in The Lancet Respiratory Medicine, showed that at the end of the trial lung function was 3.7% better in patients who received the 'active' treatment. Participants with the worst lung function at the start of the study experienced a much greater 6.4% gain compared with those in the placebo group.

 

Eoin Treacy's view -

Gene therapy has been a long time coming and still has a long way to go but the promising results from human trials is a major step forward in the commercialisation of decades of research. 



This section continues in the Subscriber's Area. Back to top
July 13 2015

Commentary by Eoin Treacy

Hacked in the U.S.A.: China Not-So-Hidden Infiltration Op

This article by Chris Strohm, Michael Riley and Jordan Robertson for Bloomberg may be of interest to subscribers. Here is a section: 

Some investigators suspect the attacks were part of a sweeping campaign to create a database on Americans that could be used to obtain commercial and government secrets.

“China is building the Facebook of human intelligence capabilities,” said Adam Meyers, vice president of intelligence for cybersecurity company CrowdStrike Inc. “This appears to be a real maturity in the way they are using cyber to enable broader intelligence goals.”

The most serious breach of records occurred at the U.S. Office of Personnel Management, where records for every person given a government background check for the past 15 years may have been compromised.  The head of the government personnel office, Katherine Archuleta, resigned Friday as lawmakers demanded to know what went wrong.

The campaign began in early 2013 with the travel records, said Laura Galante, manager of threat intelligence for FireEye Inc., a private security company that has been investigating the cyber-attacks.

 

Eoin Treacy's view -

This article from the Financial Times focusing on Israel’s cyber security industry and this article from the Wall Street Journal focusing on encryption highlight just how much of an issue internet security has become. This is a rapidly evolving sector. There is a need for more security as data evolves to being available exclusively online. Despite, its utility the infrastructure we use today is deeply flawed when it comes to security. The uses to which even our most mundane data can be put are also evolving not least since we are increasingly reliant on our online presence tor real world utility. 



This section continues in the Subscriber's Area. Back to top
June 18 2015

Commentary by Eoin Treacy

The Hunt for the Financial Industry's Most-Wanted Hacker

This article by Dune Lawrence may be of interest to subscribers. Here is a section: 

ZeuS, meanwhile, has become a permanent gift to the cyber underground. SecureWorks documented attacks that targeted more than 1,400 financial institutions across more than 80 countries—just from 2014 through March 2015. Since the ZeuS source code leak, almost all banking malware has incorporated its features, according to SecureWorks.

Eoin Treacy's view -

“We fight them over there so we don’t have to fight them here” is an outmoded mechanism for containing nefarious criminal elements regardless of whether their motivations are based on religion, greed or both. The fact that Bogachev released his program when he was 22 in 2005, has been free to sell it, post updates and was only identified in 2014 is a testament to the fact that other countries do not share the same concern for private property as we do in the West. This is particularly the case when criminal elements are targeting assets outside their respective countries. This story is based on a private enterprise with money as its goal but of course there are more sophisticated stat-run operations that have additional motivations. The world is quickly moving into a scenario where internet security will become more pervasive not least because the risks have increased.   



This section continues in the Subscriber's Area. Back to top
June 16 2015

Commentary by Eoin Treacy

Musings From the Oil Patch June 15th 2015

Thanks to a subscriber for this report by Allen Brooks for PPHB. Here is a section: 

While Dr. Larsen believes the suburbs are not going away, he points out that they are not like the suburbs in the 1950s. Both parents are often working and school activities are no longer at the schools but miles away at soccer fields and violin teachers. As a result, there will be opportunities for different transportation solutions. Dr. Larsen pointed to Mercedes' Boost business, where minivans drive children after school, but rather than school buses they drive them door-to-door. Parents can track their children with smart phone apps and the minivans have both a driver and a concierge on board. The driver cannot leave the minivan but the concierge can walk children to the door or their after-school activity. In his view, Americans will not give up their own cars. “Americans like to do everything in cars.” He pointed out that Americans eat in cars, drink in cars, have entertainment in cars, change clothes and have sex in cars. People often sleep in their cars and spend a lot of time waiting for their children. As Dr. Larsen points out, “Driving is really the distracting thing we do in cars.”

While it would appear that little has changed about the desire, need and use of automobiles, what has changed is the inside of the vehicle. “Screens have become more important,” said Dr. Larsen. You can tell how old a car is by its screen, or absence. Leased vehicles may be refurbished more often in order to make them appear newer. Therefore, it is likely there will be fewer new models but more new screen updates. Computer controls within vehicles will become smarter and more intrusive. You won’t be able to enter long addresses into navigation systems while you are driving, but only when you are stopped. After a vehicle has stopped, seat controls will allow you to put your seat back further, letting you work, sleep or watch television from the driver’s seat. The issue will become balancing personalization versus privacy. Sensors in smart phones and vehicles will allow insurers to monitor how you drive and whether you are using your phone while driving. As the nation develops “pay as you drive” car businesses or fuel taxing, Dr. Larsen suggests there are legal issues needing to be resolved, suggesting that the pace of these technology transitions may not be as quick as assumed, then on the other hand they could happen faster.

 

Eoin Treacy's view -

A link to the full report is posted in the Subscriber's Area.

Regardless of how one feels about the potential for autonomous vehicles, electric cars or even hydrogen fuel cells, consumers expect to see more technological gadgetry in their new cars, not least internet connectivity. Auto manufacturers have introduced a lot more added extras over the years with on-board self-diagnostic equipment now ubiquitous. It is reasonable to assume consumer expectations will only become more demanding as reliance on mobile interactivity becomes further ingrained in societal norms. 



This section continues in the Subscriber's Area. Back to top
June 15 2015

Commentary by Eoin Treacy

Facebook's Oculus unveils final Rift headset, new controller

This article by Troy Wolverton for San Jose Mercury News may be of interest to subscribers. Here is a section: 

Company officials said the Rift headset will come with a stand-alone sensor that will sit on users' desks. That sensor will track users' head movements as they are wearing the device and their hands when they use the Touch sensors.

But the company held off on announcing many of the details that will be crucial to its success. Oculus has not yet said precisely how much the Rift will cost, which retailers will carry it, when exactly it will be hit store shelves, or how many games will be available when it launches.
Oculus officials said they plan to release more information about the device at the company's Connect conference in September.

The number and diversity of games available for the Rift could be a big potential trouble spot. Oculus only demonstrated three games at the event Thursday, none of which represents a blockbuster title like "Halo" or "Call of Duty." Although one of the games shown is being produced by Insomniac Games, the makers of the "Resistance" series of games, Oculus did not show off any games from any of the major game companies, like Electronic Arts or Activision.

The success of new game systems is frequently determined by the number and range of games available for them. Fledgling systems can often suffer from a chicken-and-egg type scenario: consumers won't buy them until more games are available, while developers won't create games for them until a significant number of units are in consumers' hands.

 

Eoin Treacy's view -

There is a wide range of potential applications for virtual reality devices from entertainment to exercise and shopping. This is an emerging technology which has been evolving for a long time but is only now reaching commercial scale. 

Three years ago Bloomingdales installed Facecake’s virtual dressing room and Swivel technology which has not yet gained widespread traction.   The virtual reality retail application pioneered by Context Solutions still has a long way to go if it is to represent an interactive product.  This article by Heather Somerville also from the San Jose Mercury News site dated 2012 is useful for context. 



This section continues in the Subscriber's Area. Back to top
June 11 2015

Commentary by Eoin Treacy

The virtual reality revolution, if it's coming at all, starts tomorrow

This article by Will Shanklin for Gizmag may be of interest to subscribers. Here is a section:

Perhaps game consoles (appropriately) will be the most likely role models for VR platforms. As a child in the 80s, my first experiences with the Atari and NES kindled a wide-eyed sense of wonder that's harder to replicate as an adult. Though those same games only give me slight glimmers of that feeling today, VR rekindles that childlike sense more than any form of entertainment since (certainly more than today's cinematic AAA video games or fads like 3D movies ever did).

Gaming spent many years as a "kids' product," but as that first generation of child gamers grew up – and realized there was no reason for them to leave their hobby behind – it blew up as a lucrative industry that now knows no generational boundaries (well, almost no boundaries – gaming demographics do still lean more towards younger adults than older ones).

Perhaps, like gaming, VR will start with the most wide-eyed of users, and only gradually erode the stigmas and unfamiliarity that keeps the rest of the world from joining the party.

So what do we think? Well, in our eyes, any technology that can rekindle, and perhaps surpass, the pure joy and awe of playing Super Mario Bros. or Mike Tyson's Punch-Out for the first time – only 30 years later – has a great shot at widespread success. Whether it's in a year or a decade, it may simply be a matter of a) getting VR to a consumer-ready, high-quality stage and then b) getting enough people to try it. That first step began years ago, but the second step starts tomorrow.

Eoin Treacy's view -

As a child of the ‘80s and a watcher of Star Trek the Next Generation in the ‘90s I was one of those who was excited about the impending wide scale release of virtual reality technology that did not happen. It takes a long time for new technology to advance enough for it to become a major new consumer product. NASA was one of the primary early developers of the technology in the 1980s. They envisaged virtual reality as a way for astronauts to control robots remotely in order to reduce the risk to human operatives. The results of DARPA’s robotics competition earlier this week highlight how much robotics technology has improved but also how far it still has to go. 



This section continues in the Subscriber's Area. Back to top
June 11 2015

Commentary by Eoin Treacy

Email of the day on the lack commonality in luxury goods companies

I read this article about luxury goods in today's FT  and then ran through your luxury goods section in your Favourites in the Chart Library. I cannot see a common pattern in the charts. Since this a major element of what you teach in the Chart Seminar, I would like your thoughts on this particular case.

Eoin Treacy's view -

Remy Cointreau was among the greatest beneficiaries of the largesse of Chinese officialdom since its expensive liquors were consumed at so many dinners. This all came to a halt in 2013 when Xi Jinping’s corruption crackdown gained traction. Conspicuous consumption suddenly became unfashionable as bloggers posted photos of cadres wearing luxury watches. This was highlighted most poignantly at this year’s annual Party meeting when a number of high profile wives of senior officials were seen holding cheap plastic handbags rather than the Chanel and Hermes bags of previous years. 



This section continues in the Subscriber's Area. Back to top
June 10 2015

Commentary by Eoin Treacy

How big is the Internet of Things and how big will it get?

This article by Philip Howard for the Brookings Institute may be of interest to subscribers. Here is a section: 

First, knowing the default passwords for pieces of key equipment could give someone access to hundreds of thousands of consumer devices and tens of thousands of industrial devices around the world, from gaming platforms to industrial-control systems. So as the world’s security experts debate the impact of the latest sophisticated hacking attempts from China or the encryption possibilities of quantum computers, just knowing factory passwords means someone can access any device once it leaves the factory and is connected to the Internet.

Second and more concerning, the bot discovered other bots. Carna wasn’t the only unauthorized bot checking for open ports on devices around the globe. Carna was written as a public service for an exploratory project, and it built a botnet to do the census. But, the census taker found several competing botnets, and an enormous, sleeping, network of bots called Aidra, which had compromised as many as thirty thousand devices. Aidra had the power to hijack not just computers but gas meters, refrigerators, microwaves, car-management systems, and some mobile phones. The bots could attack any network infrastructure for a client with a denial-of-service attack. Carna Bot performed the public service of temporarily disabling any Aidra bots it found.

 

Eoin Treacy's view -

Just about every month there is news of another organisation that has had its data stolen. As a result the discovery last year of the theft of SIM card encryption keys from Gemalto that occurred in 2010 or 2011 tends to be forgotten. However, there is some pretty clear evidence that it was the USA’s NSA and UK’s GCHQ that colluded to steal the data.  It’s worth bearing this in mind when Chinese hacking is so publicly denounced. 



This section continues in the Subscriber's Area. Back to top
June 02 2015

Commentary by Eoin Treacy

Platinum sector faces Kodak moment in fuel cell technology

This article by Clara Denina & Silvia Antonioli for Mineweb may be of interest to subscribers. Here is a section: 

The world’s three largest platinum producers Anglo American Platinum (Amplats), Impala Platinum and Lonmin are all investing in projects related to fuel cell technologies, which generate electricity that can power vehicles by combining hydrogen and oxygen over a platinum catalyst.

But analysts doubt fuel cell vehicles will rival the growth of their electric counterparts, mostly because battery recharging stations are less costly and already more widespread than hydrogen refuelling stations.

“As out of the two new technologies only fuel cells use platinum, I guess the miners think they have no choice,” Macquarie analyst Matthew Turner said. “But people are buying electric cars…and that’s not the case for fuel cells.”

Amplats, which has invested about $35 million in the last five years in companies developing new uses for platinum, mostly through fuel cell technology, is mindful of the stakes.

“I don’t want Anglo American Platinum, or any of our partners or customers to be a Kodak,” Amplats Chief Executive Chris Griffith said last week, referring to the once mighty photography pioneer that was slow to transition to digital photography.

 

Eoin Treacy's view -

Platinum miners are not the only companies making big bets on hydrogen fuel cells. Toyota’s decision to release its Mirai fuel cell vehicle later this year and to open its patents to developers highlights their efforts to pioneer new technologies. After all it was Toyota’s Prius that was the first mass market hybrid vehicle. 

Nevertheless, electric cars are gaining increasing traction as solar cell efficiency increases. There is also the potential for wind turbines to be smaller and less noisy. With the advent of home batteries the outlook for electric vehicles is looking even more promising. 



This section continues in the Subscriber's Area. Back to top
June 01 2015

Commentary by Eoin Treacy

High Prices for Drugs Attacked at Meeting

This article by Joseph Walker for the Wall Street Journal may be of interest to subscribers. Here is a section: 

Dr. Saltz said the combination regimen’s benefit was “truly, truly remarkable for a disease that five years ago we thought was virtually untreatable.” But he said that combining the drugs would cost around $295,000 a patient over nearly one year, which he called unsustainable. If all U.S. patients with metastatic cancer took drugs priced at $295,000 a year, it would cost $174 billion to treat them all for just one year, Dr. Saltz said.

“The unsustainably high prices of cancer drugs is a big problem, and it’s our problem,” Dr. Saltz said, calling on industry, physicians and insurers to work together with government to address the issue.

Dr. Saltz’s estimate of the combination’s cost was based on the average wholesale price of each drug individually and the average weight of a U.S. adult. Opdivo and Yervoy are already approved individually to treat melanoma patients, but not in combination with each other.

Eoin Treacy's view -

Biotechnology companies have in many respects taken over the risk of developing new therapies and medicines from the more established pharmaceutical companies. As a result their products have tended to be more expensive when first released as companies try to make the best commercial utility of their patents before they expire. Nevertheless, is it is seldom good for business when doctors make public comments on the expense of products not least by highlighting the conflict of interest in they receiving a commission for prescribing them. 



This section continues in the Subscriber's Area. Back to top
May 28 2015

Commentary by Eoin Treacy

Avago Agrees to Buy Broadcom for $37 Billion

This article by Dana Mattioli, Dana Cimilluca and Shayndi Raice for the Wall Street Journal. Here is a section:

 

Neither Avago nor Broadcom has the kind of dominance over individual markets that better-known rivals such as Intel Corp. and Qualcomm Inc. enjoy, and a merger could help address that. In addition to consumer applications, Broadcom supplies the vast majority of chips used in the latest networking switches found in corporate data centers, a fast-growing business that could enhance Avago’s communications-focused revenue stream.

And

Researcher Dealogic estimated before the deal was announced that an acquisition of Broadcom valued at $35 billion would be one of the largest semiconductor takeovers ever, coming amid a burst of deals among such companies. So far this year, there have been more than $26 billion in semiconductor deals announced globally, not including the tie-up between Broadcom and Avago, according to Dealogic. That is more than double the volume in the same period last year and the largest year-to-date total since Dealogic started keeping records in 1995.

Eoin Treacy's view -

With interest rates so low and corporate spreads no longer contracting there has seldom been such an opportune time to borrow money. The flip side is that prices have increased in line with increased activity. Nevertheless demand for chips remains robust as the number of connected devices remains on a secular growth trajectory in line with the Internet of Everything theme.

Broadcom had been confined to an almost 15-year base and it took an acquisition to push it to new recovery highs. This helps to illustrate how focused the bull market has been on a select group of companies. As prices increase it is inevitable investors will look for promising companies that have not yet rallied which may represent catch-up potential.

Avago remains in a reasonably consistent uptrend and while somewhat overextended relative to the 200-day MA at present, a sustained move below $110 would be required to question medium-term scope for additional upside.

The results of this Chart Library Filter of the Nasdaq Composite Index highlight that there are a number of shares with similar long-term base formation completion characteristics. 



This section continues in the Subscriber's Area. Back to top
May 28 2015

Commentary by Eoin Treacy

What Google Just Announced Is a Bombshell

This article by Joshua Topolsky for Bloomberg may be of interest to subscribers. Here is a section: 

For instance, while listening to music in Spotify you can search for more info on an artist, or if you're talking about a restaurant in WhatsApp, Google can pull up data on the place and even help you make reservations. And this is not a feature of the app itself, rather a helper that lives inside of the entire operating system.

This is a major move for two reasons. The first is that it really brings Google back to a place of dominance as the glue that holds your digital life together. The web has thrived and grown in no small part because of Google's ability to track, organize, and understand all of its disparate pieces. Now it's able to do the same thing with every app running on your phone. It allows Google to get back into the search game by speaking the common language of apps. It gives the company a second life with access to user behavior and needs.

But secondly, it starts to show how Google can be an interconnecting layer between the apps themselves — a kind of neutral staging ground between one action and another. This is a sea-change for how we use our mobile devices and how mobile apps interact with one another. Currently, we use OS-defined tools which let apps interact with each other (with rules defined by the OS-makers, not developers). But imagine if developers didn't have to think about how their work connects to the rest of your world? Imagine if Now on Tap is aware enough of the core functions of those apps that it can predict what you'd most likely want to do with them, and then execute on those needs?

Eoin Treacy's view -

We have become somewhat inured by Google’s announcements of what can realistically be described as vanity projects; plans for a massive new headquarters which had to be shelved being the most recent. However today’s release is important because it takes Google back into where it makes the vast majority of its money. I downloaded the Google search app onto my phone last week. The linking together of various different elements of search results is a positive development in my opinion. I’ve been using it more as a result and this type of user engagement should be beneficial for the company’s bottom line. 



This section continues in the Subscriber's Area. Back to top
May 26 2015

Commentary by Eoin Treacy

Email of the day on robotics and the Eoins Favourites section of the Chart Library:

Regarding your optimism of the robotics and tech story and the prospects of the likes of FANUC in Japan, could you recommend a UK based investment vehicle to access FANUC and its peers? Also could you explain the criteria on the "Eoin’s favourites" section of the chart library?, I am assuming that they are favourites as in best of class as opposed to just favourites/watchlists from a both long and short perspective? Best regards

Eoin Treacy's view -

Thank you for these questions which I’m sure will be of interest to subscribers. Let me take them in reverse order. 

Over the years every time I have posted a review of a stock market sector I created a section in my Favourites so that I could easily return to the list in future. At The Chart Seminar I use my Favourites to go through examples of Commonality and to review sectors of interest to delegates. One of the most common requests in the feedback we get is that subscribers would like to have access to my Favourites list rather than recreating their own. With that in mind I started recreating the various sections from my Favourites in the main Chart Library about six months ago.

All of my lists of Dividend Aristocrats, Dividend Champions and Dividend Contenders can be found here.  

The Eoin’s Favourites section contains the lists I have so far entered. It’s not complete yet but it is meant to function as a resource rather than a recommendations list. 

 



This section continues in the Subscriber's Area. Back to top
May 26 2015

Commentary by Eoin Treacy

Audi claims first synthetic gasoline made from plants

This article by Eric Mack for GizMag may be of interest to subscribers. Here is a section:

In late 2014, Global Bioenergies started up the fermentation unit for a pilot program to produce gaseous isobutane from renewable biomass sugars such as corn-derived glucose. Gaseous isobutane is a sort of raw material for the petrochemical industry that can then be refined into a variety of plastics, fuels and other applications.

The next step in the process was to run the material through a conditioning and purification process, allowing it to be collected and stored in liquid form under pressure. Some of it was then sent to Germany to be converted into isooctane fuel, creating a pure, 100 octane gasoline.
"To me this is a historic moment," says Global Bioenergies CEO Marc Delcourt. "It is the first time that we have produced real gasoline from plants."

Isooctane is currently used as an additive to improve fuel quality, but could also be used a stand-alone fuel. Audi calls the final, refined form of the fuel "e-benzin" and claims that it burns clean due to its lack of sulfur and benzene. Also, its high grade enables it to power engines using high compression ratios for more efficiency.

Audi will test the fuel composition and conduct engine tests to see how it performs before eventually trying it out in vehicle fleets. Delcourt says he could see it being used in consumer cars on a large scale "very soon."

"We thinking we're bringing green-ness to a field that desperately needs green-ness," says Rick Bockrath, vice president for chemical engineering at Global Bioenergies. "It's basically how we're moving away from an oil-based economy towards something that has a renewable, sustainable future to it."

 

Eoin Treacy's view -

This follows a story from a month ago talking about how Audi produced a diesel fuel from air and water through a chemical process. Today’s story is a further iteration of this concept.

In the last month we have also learned that artificial photosynthesis has been achieved. Here is a section from an article by Lynn Yarris for Lawrence Berkeley National Lab: 

Scientists with the U.S. Department of Energy (DOE)’s Lawrence Berkeley National Laboratory (Berkeley Lab) and the University of California (UC) Berkeley have created a hybrid system of semiconducting nanowires and bacteria that mimics the natural photosynthetic process by which plants use the energy in sunlight to synthesize carbohydrates from carbon dioxide and water. However, this new artificial photosynthetic system synthesizes the combination of carbon dioxide and water into acetate, the most common building block today for biosynthesis.

“We believe our system is a revolutionary leap forward in the field of artificial photosynthesis,” says Peidong Yang, a chemist with Berkeley Lab’s Materials Sciences Division and one of the leaders of this study. “Our system has the potential to fundamentally change the chemical and oil industry in that we can produce chemicals and fuels in a totally renewable way, rather than extracting them from deep below the ground.”



This section continues in the Subscriber's Area. Back to top
May 21 2015

Commentary by Eoin Treacy

CalAmp and the Internet of Things

Thanks to a subscriber for this note from Canaccord Genuity on CalAmp which may be of interest to subscribers. Here is a section: 

We hosted upbeat investor meetings with CalAmp CEO Michael Burdiek on April 29th, in the mid-Atlantic region. Following our meetings, we maintain our belief CalAmp is well positioned for solid long-term growth in the Industrial IoT market through both organic initiatives that include entering new markets and through potential acquisitions. In fact, we believe CalAmp’s recent $150M low-interest rate convertible offering provides the company with increased financial flexibility for its M&A strategy focused on accretive acquisitions in targeted IoT verticals. We remain impressed with management’s longer-term strategy to build upon its strong hardware portfolio and offer an increasing mix of higher-margin recurring revenue solutions. Finally, as evidenced by the strong Q4/F2015 results, we believe CalAmp’s Wireless DataCom business is well positioned to drive strong F2016 and F2017 sales and earnings growth driven by ramping sales to Caterpillar, growing insurance telematics sales, ramping international sales, a growing product portfolio, an increasing list of new customer opportunities, and anticipated steady growth of higher-margin recurring revenue sales. We maintain our BUY rating and $26 PT. 

Eoin Treacy's view -

A link to the full report is posted in the Subscriber's Area.

The Internet of Things represents a myriad group of themes often with little relation to one another. CalAmp for example focuses on automobile connectivity particularly for those with large fleets of vehicles they need to monitor. On the other hand Sensata Technologies produces the sensors that allow diesel vehicles in particular to run self-diagnostics. Both are leveraged to the auto sector and both are in the sensor and enhanced communication segments that contribute to the Internet of Things theme but they are not strictly related. 



This section continues in the Subscriber's Area. Back to top
May 18 2015

Commentary by Eoin Treacy

Microsoft Windows 10 is on board the Spark Platform

This press release caught my attention over the weekend. Here is a section:

As a 3D printing platform, Spark brings the power of 3D printing into other technologies. By pairing with Microsoft, Spark will enable Windows 10 users to directly access optimized and more reliable 3D printing experiences. Additionally, Microsoft's worldwide developer community can freely access Spark's APIs and development platform to create 3D printing enabled applications for the Windows platform. 

Steve Guggenheimer, Corporate Vice President of Developer Platform & Evangelism and Chief Evangelist for Microsoft explains it this way:

"We’re approaching a tipping point with 3D printing, which means there is a huge market opportunity waiting for companies developing applications for Windows 10. By providing the 3D printing building blocks found in the Spark platform and optimizing it for Windows 10,

Autodesk has empowered our global developer community to confidently enter this new world of additive manufacturing.”

All of this means that the steps between ideation, design, and physical creation in additive manufacturing have just become quite a bit more streamlined. The future is now, and it’s powered by Spark.

 

Eoin Treacy's view -

Autodesk is making a big push to become the go-to company for 3-D printing. As a major manufacturer of Computer Aided Design (CAD) software one could argue that producing the tools necessary to take 3-D printing to the next level is a natural progression. Early 3-D printer manufacturers rallied impressively from 2012 and into 2013 but had to engage in an aggressive M&A battle to maintain their top position. Not only have they had difficulty integrating all of the companies they bought, but 3-D Systems and Stratasys now run of the risk of being left behind by evolving technological innovation they have no part in. 



This section continues in the Subscriber's Area. Back to top
May 15 2015

Commentary by Eoin Treacy

Netflix Tops $600 a Share, Said to Be in Talks to Enter China

This article from Bloomberg may be of interest to subscribers. Here is a section: 

Entering China would let Netflix, the broadcaster of “House of Cards” and “Orange Is the New Black” take advantage of what’s forecast to be explosive growth in online TV in the nation of 1.4 billion people. The market is estimated to almost triple to 90 billion yuan by 2018, according to Shanghai-based Internet consultant IResearch.

A local partnership would be essential given the Chinese government’s strict controls over licensing for online content. Netflix wants a partner that has licenses for content on all devices -- including mobile phones, computers and set-top boxes, according to the people. China’s State Administration of Press, Publication, Radio, Film and Television has given Internet TV licenses to seven companies, including Wasu.

Wasu didn’t respond to an e-mail seeking comment. Two phone calls to Wasu’s general line weren’t answered.

 

Eoin Treacy's view -

Gaining a foothold China would be a major prize for Netflix but it will have to tread carefully and approach the right partner if it is to succeed in this venture. Additionally there are a number of Chinese competitors it will need to face down regardless of which partner it chooses. 



This section continues in the Subscriber's Area. Back to top
May 15 2015

Commentary by Eoin Treacy

SMA Solar Jumps in Frankfurt as U.S., Japan Sales Narrow Losses

This article by Stefan Nicola for Bloomberg may be of interest to subscribers. Here is a section: 

SMA Solar Technology AG, a German solar company that’s cutting a third of its staff to reduce costs, rose to a three-week high in Frankfurt after first-quarter sales jumped and losses narrowed.

SMA climbed as much as 5.9 percent to 14.50 euros, the highest intraday level since April 23, after saying sales grew 28 percent to 226 million euros ($254 million) and a loss on earnings before interest and taxes narrowed to 5.4 million euros. Sales were driven by large-scale solar projects in North America, Japan, the U.K. and Australia, it said.

“With the sales generated and the order backlog at the end of the first quarter, we have already achieved more than 60 percent of our sales target for the year,” Chief Executive Officer Pierre-Pascal Urbon said. “The earnings situation developed better than planned, partly due to the reduction of fixed costs already initiated and to exchange rate effects.”

 

Eoin Treacy's view -

Solar cells produce direct current but if you want to it to power your home, heat your water or sell electricity back onto the grid it needs to be inverted into alternating current. Therefore everyone who buys solar cells must also buy an inverter. While SMA Solar is a global leader in manufacturing inverters it is not the cheapest. 



This section continues in the Subscriber's Area. Back to top
May 14 2015

Commentary by Eoin Treacy

Google reveals lessons learned (and accident count) from self-driving car program

This article by Francis X Govers III for Gizmag may be of interest to subscribers. Here is a section: 

Urmson's statements came in the form of a post on Backchannel, which followed an Associated Press report revealing the accident count in the wake of a new California law requiring Google and others to report accidents involving its self-driving cars to the state. Google reported three accidents between May 2014 and May 2015, while Delphi, which has its own version of a self-driving car, an Audi SQ5, reported its vehicle was struck while waiting to turn at an intersection and not under autonomous control.

In his post, Urmson details that the Google Cars were rear-ended seven times by other cars, side swiped twice, and hit once by a car running a stop sign, with the majority of the accidents occurring on city streets rather than highways. The 1.7 million miles (2.7 million km) the cars are reported to have traveled combines the distance traveled autonomously and under manual control.

Eoin Treacy's view -

The more data that is recovered from self-driving cars, the more confidence we can have that they are approaching commercial utility. Last week’s announcement that Nevada is pressing ahead with legalising autonomous vehicles is a major step forward for companies like Daimler and Google pioneering the rollout of this technology. 



This section continues in the Subscriber's Area. Back to top
May 13 2015

Commentary by Eoin Treacy

7 Top Futurists Make Some Pretty Surprising Predictions About What The Next Decade Will Bring

This article by Jacqueline Howard for the Huffington Post may be of interest to subscribers. Here is a section:

Dr. Ray Kurzweil, inventor, pioneering computer scientist, and director of engineering at Google:
"By 2025, 3D printers will print clothing at very low cost. There will be many free open source designs, but people will still spend money to download clothing files from the latest hot designer just as people spend money today for eBooks, music and movies despite all of the free material available. 3D printers will print human organs using modified stem cells with the patient's own DNA providing an inexhaustible supply of organs and no rejection issues. We will be also able to repair damaged organs with reprogrammed stem cells, for example a heart damaged from a heart attack. 3D printers will print inexpensive modules to snap together a house or an office building, lego style.

Eoin Treacy's view -

Technological innovation is accelerating at an exponential pace. Fashion is already largely online and Amazon delivers within two days so the merit of 3D printing a garment which has a low incremental cost to begin with is questionable. However, printing items with high incremental value that once took days, weeks or were previously impossible is another story entirely. It is already possible to have a dental crown manufactured within an hour of scanning and advances are regularly announced in the medical field. 



This section continues in the Subscriber's Area. Back to top
May 07 2015

Commentary by Eoin Treacy

Alibaba Shares Surge as Chinese E-Commerce Giant Replaces CEO

This article by Lulu Yilun Chen and Tim Culpan for Bloomberg may be of interest to subscribers. Here is a section: 

Alibaba Group Holding Ltd. shares surged the most intraday since September as the company named a new chief executive officer, nine months after a record initial public offering.
China’s biggest e-commerce operator posted a 45 percent increase in revenue.

Daniel Zhang will become CEO on May 10, replacing Jonathan Lu, who will remain on the board as vice chairman, the company said Thursday. The change was announced as Alibaba’s sales rose to 17.4 billion yuan ($2.8 billion) in the three months ended in March, beating analysts’ estimates.
Zhang hopes to build a global platform beyond China, part of a strategy that is “a long journey,” he said in an interview Thursday on Bloomberg Television.

Alibaba’s market value had plunged as much as $90 billion from a November peak amid concern about slowing economic growth and criticism from the Chinese government about its business practices. Billionaire Chairman Jack Ma elevated Zhang after the chief operating officer helped turn the Nov. 11 “Singles’ Day” shopping promotion into the company’s biggest sales day.

“Perhaps Jack is sending a signal to the capital markets and the regulator that he’s willing to make changes,” said Mike Clendenin, managing director of RedTech Advisors.

Eoin Treacy's view -

Alibaba’s honeymoon period is over. Investors are now focusing on the success of its business model in delivering on the promise of international domination. One of the issues it faces with competing internationally is the long shipping times required to move goods from China to the end customer. Solving this challenge requires a great deal of investment in logistics and local warehousing within target markets. As a result progress is slow. 



This section continues in the Subscriber's Area. Back to top
May 01 2015

Commentary by Eoin Treacy

Elon Musk Challengers Jostle to Solve Riddle of Energy Storage

This article by Will Wade for Bloomberg may be of interest to subscribers. Here is a section:

If the storage breakthrough is coming, it seems obvious it would happen in California, which has long led the U.S. in supporting alternative energy. The state has the most demanding fuel-efficiency standards for cars, as well as incentives that have made it the biggest market for solar power in the U.S.

California “is often a lab” for the rest of the country, said Brian Warshay, an analyst at Bloomberg New Energy Finance. It will “continue to be so on the storage front.”

Older methods of trying to store power have existed for decades, including pumped hydropower facilities in which water is sent to higher elevation reservoirs and released through lower turbines to produce electricity when demand is high.

 

Eoin Treacy's view -

Here is a link to Tesla’s website where they highlight some of the key features of the Powerwall battery. Perhaps the most important consideration today is that almost no one has a battery in their home and that in a decade it could be commonplace. I reviewed the residential battery sector on April 23rd

As much as smoothing out supply and demand curves for electricity use in the home are interesting, the industrial and utility sectors are just as exciting. 

 



This section continues in the Subscriber's Area. Back to top
April 30 2015

Commentary by Eoin Treacy

US listed China

Eoin Treacy's view -

The opening of the Shanghai-Hong Kong Stock Connect has acted as a catalyst for the revival of interest in the Chinese stock market since November. Since then the mainland administration has followed with market support measures including lower bank reserve requirements, cutting interest rates, removing obstacles to property speculation, opening the market for equity options as well as a politicians talking the market higher. 

The Shanghai A-Share Index began to rally from July and surged higher in October led by brokers, insurance companies, banks and railroads. Following consolidation between January and March it has rallied for the last eight consecutive weeks and is increasingly susceptible to consolidation of those gains. 

While Hong Kong had similar valuations to mainland China it did not rally in line with the mainland. Part of the reason for this is because of the civil unrest that roiled investor sentiment late last year. In fact while the stock connect is a two-way channel between the mainland and Hong Kong and has been open for six months, the mainland to Hong Kong avenue only hit its limit for the first time this month. Hong Kong is now playing catch up with the mainland listed market. 

 



This section continues in the Subscriber's Area. Back to top
April 24 2015

Commentary by Eoin Treacy

Amazon, Microsoft Profit From Cloud as Nasdaq Reaches Record

This article by Tom Giles for Bloomberg may be of interest to subscribers. Here is a section: 

Minutes after the Nasdaq Composite closed at a record, three of the biggest bellwethers in technology reminded the market precisely why investors are so bullish on companies that do business through the Web.

Amazon.com Inc. for the first time broke out sales from its division that sells computing power and software via the Internet, reporting a 49 percent jump last quarter. Microsoft Corp. posted profit that topped analysts’ estimates, also underscoring healthy demand for software delivered through the cloud. Google Inc. benefited from rising volume of online ads.

The numbers are a testament not only to the endurance of the Internet as a conduit of commerce and information, but also to the ways it has revolutionized how the world’s biggest corporations operate. All three companies have been at the heart of these changes since the Web’s inception as a business tool, and are now vying for a bigger slice of the still-fledgling market for cloud computing.

Google is seeking to extend its lead in online search and advertising, Amazon is spending billions of dollars to expand in e-commerce and data centers, and Microsoft is building on its dominance of the business-software market.

“We are innings one or two of the cloud,” said Kim Forrest, an analyst at Fort Pitt Capital Group Inc., which oversees about $1.8 billion in Pittsburgh.

 

Eoin Treacy's view -

This is a big day for the Nasdaq. Back in 2003 no one anticipated the Index would surmount its bubble peak in little more than a decade. Of course the relative weightings of the Index have changed almost beyond recognition in that time but above all else, the Nasdaq’s performance is a testament to how successful the USA is at creating companies that fill market niches we never knew existed. 



This section continues in the Subscriber's Area. Back to top
April 23 2015

Commentary by Eoin Treacy

Tesla Wants to Power Wal-Mart

This article by Dana Hull for Bloomberg may be of interest to subscribers. Here is a section: 

Jackson Family Wines, based in Santa Rosa, has a new partnership with Tesla involving battery storage and several vehicle charging stations, according to the February issue of Wine Business Monthly. The winery declined to comment.

Mack Wycoff, Wal-Mart’s senior manager for renewable energy and emissions, said the company is intrigued by energy storage. “Instead of pulling electricity from the grid, you discharge it from the battery,” he said. “Ideally you know when your period of peak demand is, and you discharge it then.”

Mike Martin, Cargill’s director of communications, declined to provide details about how the company plans to use Tesla batteries at the Fresno plant. The 200,000-square-foot facility, one of the largest of its type in California, produces nearly 400 million pounds of beef each year.

Janet Dixon is director of facilities at the Temecula Valley Unified School District in southern California, which plans to install solar panels at 20 of its 28 schools this summer. Dixon said that SolarCity is the solar provider, and five of the facilities will have Tesla batteries.

“We spend roughly $3 million a year on electricity, and most of that is lighting and air conditioning,” said Dixon. “We are going solar to reduce our overall costs and the battery storage should help us manage our peak demand.”

Eoin Treacy's view -

Tesla trades on aggressive multiples. Since its car sales are a fraction of even the smallest auto manufacturer, it will be quite some time before the company will compete on that front even if one assumes that large numbers of people will be driving electric vehicles 10 years from now. Batteries are a much bigger story for Tesla which is why they are investing so much capital in building a “gigafactory” which they anticipate will deliver the economies of scale necessary to drive down the cost of their products.

At the present moment almost no one has a battery in their home. As solar technology improves and the prospect of containing volatility on energy spending becomes a realistic possibility demand is likely to increase. At the present moment the solar cells companies like SolarCity are installing in homes are not particularly efficient. However, as the efficiency rates of laboratory tested products reach commercialisation the energy generation capacity of one’s home will rapidly improve. Therefore the efficiency of solar and the potential demand landscape for home batteries are linked. 



This section continues in the Subscriber's Area. Back to top
April 22 2015

Commentary by Eoin Treacy

Meet the Silicon Valley companies that top the list of cybersecurity innovators

Thanks to a subscriber for this article from Silicon Valley Business Journal. Here is a section: 

The Cybersecurity Ventures second-quarter report lists Milpitas-based cybersecurity and malware protection business FireEye as the No. 1 hottest cybersecurity company. AlienVault and Norse of San Mateo also topped the list. Silicon Valley companies Splunk, Beyond Security, Palo Alto Networks, Intel Security Group, Caspira and Proofpoint also ranked in the top 30.
Cybersecurity Ventures, founded in 1999 and based in Menlo Park, is a research and market intelligence firm.

“FireEye is continuing to grow its global customer base and employee headcount, while getting kudos for its technology platform and product lineup, alliance partner integration, channel program, service and support from the entire cybersecurity community,” said Steve Morgan, CEO of Cybersecurity Ventures and editor-in-chief of the Cybersecurity 500, in a statement. “FireEye is a leader in IT and cloud security, and it's added to that by becoming a top brand in the burgeoning mobile security sector.”

 

Eoin Treacy's view -

As banking, retail, insurance and entertainment move increasingly online, credit card companies have been some of the greatest beneficiaries because they insure purchases against fraud. Nevertheless, identity theft is the fastest growing crime in the USA, not least because chip and PIN technology is so underused and because Trojans can reside on one’s computer for lengthy periods without detection. 

As cyber threats become more sophisticated the requirement for greater security measures remains a growth industry and one which is increasingly competitive. This is creating demand both for software and hardware solutions. 

The list of the sector’s most significant companies in the above article highlights just how many are still privately held. Clicking through the constituents of the cyber security section of the Chart Library there are clear winners and losers.   

 



This section continues in the Subscriber's Area. Back to top
April 21 2015

Commentary by Eoin Treacy

China Trip Report

Eoin Treacy's view -

The first time I visited China was in 2005 and I didn’t stop coughing until we got back on the plane to leave. The pollution was such that you couldn’t see more than 100 metres in any direction for the entire time we were there and I didn’t think to wear a face mask. It was November. 

Utilities burn large quantities of coal in North China between October and March for heating which results in heavy smog across a wide swathe of the country. From April the weather heats up so heating demand goes down and the air improves. I’ve been to Beijing in the summer and autumn but this was the first time in the spring and the air was cleaner than I’ve ever seen it before. Visibility was up to about a mile and there was a powdery blue sky overhead. 

Mrs. Treacy has often talked about the dust storms that hit Beijing in the spring as well as the willow catkins that fill the air. We experienced both on this occasion. The catkins in particular looked like snow on the freeway and delighted my daughters. 

 



This section continues in the Subscriber's Area. Back to top
April 20 2015

Commentary by Eoin Treacy

Report from The Chart Seminar in Singapore

Eoin Treacy's view -

Last week’s event was another enjoyable visit to Singapore and was an apt time to ruminate on Lee Kwan Yew’s legacy of turning a tropical backwater into a first world private banking and high end manufacturing centre. Delegates came in from Argentina, Australia, Japan and of course Singapore which led to some interesting and varied discussions.

Singapore’s stock market is being led higher by the banking sector and shares a high degree of commonality with Taiwan and South Korea. The Index is somewhat overbought in the short-term and some consolidation of recent gains in looking likely. However a sustained move below the 200-day MA, currently near 3400, would be required to question medium-term scope for additional upside.

As one might imagine the main topic of conversation was on the outlook for the Asian region not least following China’s explosive breakout over the preceding three weeks.  Delegates were also interested in the outlook for the European region and we also looked at the S&P 500. We looked at the oil price and a number of related instruments. We also looked at gold prices and a number of miners, select Singapore shares as well as a wide range of international bank shares. We also had a wide ranging discussion on currencies. 



This section continues in the Subscriber's Area. Back to top
March 24 2015

Commentary by Eoin Treacy

The Tricorder, An All-In-One Diagnostic Device, Draws Nigh

Thanks to a subscriber for this article from readwrite.com concentrating on the Qualcomm sponsored Tricorder X-Prize. Here is a section: 

“We’re pretty confident that the majority of the 10 finalist teams will actually be able to deliver,” senior director Grant Company said. “Some may merge, and some may fall out, just because they can’t pull it together. And that just reinforces how big of a challenge this really is. It’s because the goals are very high.”

The winning “tricorder”—and its competitors—likely have a long FDA approval process ahead of them, which means their consumer release could be years away. But when they do arrive, they will be able to diagnose problems like stroke, anemia and tuberculosis—tasks that have always been reserved for doctors.

Diagnosis: Home Diagnosis
Such devices will arrive at an interesting time in medical history. With the emergence of mobile phones and wearable devices, home diagnostics are poised to explode.

Company said the Apple Watch and affiliated software development, will be a welcome boost for the space.

“I think it’s a good first step, and a useful barometer of what the public’s appetite is for this type of technology,” Company said. “There’s going to be a need of collection and analysis, and these types of tools are going to be absolutely critical. If the masses are able to start building capabilities, using these research kits, it’s the first step toward adoption.”

 

Eoin Treacy's view -

I grew up watching Star Trek The Next Generation with my father and brothers and I suspect a number of people engaged in developing new technologies such as a tricorder are of a similar vintage. 

This article by Anna McCollister-Slipp highlights how the vast majority of the health system is geared towards acute care when chronic conditions represent a major challenge. It is this latter group that will be helped most by a more cohesive data acquisition and interpretation strategy. This is likely to be pioneered by new technologies such as tricorders and wearables. 

 

 



This section continues in the Subscriber's Area. Back to top
March 23 2015

Commentary by Eoin Treacy

Jen-Hsun Huang Kicks Off NVIDIA 2015 GPU Technology Conference

This 2-hour webcast from Nvidia where Jen Hsun Huang and Elon Musk converse may be of interest to subscribers. Here is a section: 

“We’ll take autonomous cars for granted in a very short period of time,” Elon says.

JHH asks about government policies, saying he’d love to work on email while driving to work, quickly adding that he’d like to do so without breaking the law. What does the government need to do?

Elon notes that it will be several years after self-driving becomes possible that government will allow it. They want a car to be not as safe as a person driving but significantly safer.

“When it comes to public safety, there’s an argument for being quite cautious before there’s a change. I don’t think it’s the case right now that there’s a full autonomous system that regulators aren’t approving. But there could be next year.”

“I don’t think it’s the case right now that there’s a full autonomous system that regulators aren’t approving,” Tesla Motors CEO Elon Musk. “But there could be next year.”

Elon adds that the first thing we try to do is establish a hardware platform so we can do continuous updates to the software. A lot of that will happen later this year. I have an announcement on Thursday, and I don’t want to get ahead of that.

He deflects Jen-Hsun’s kidding effort to ask if he want to share that news, “There’s going to be a call on Thursday on what’s going to be in our next version for anyone that’s interested, that’s all”

 

Eoin Treacy's view -

Anyone who has ever played a pc game will be familiar with the positive difference an Nvidia graphics card can have on the experience. As the company’s CEO goes on to explain in the above webcast they now do a lot more than that. This section from an Nvidia blog highlights the importance of GPU processors in speeding up computations as well as highlighting their origin in gaming: 

The GPU’s advanced capabilities were originally used primarily for 3D game rendering. But now those capabilities are being harnessed more broadly to accelerate computational workloads in areas such as financial modeling, cutting-edge scientific research and oil and gas exploration.

In a recent BusinessWeek article, Insight64 principal analyst Nathan Brookwood described the unique capabilities of the GPU this way: “GPUs are optimized for taking huge batches of data and performing the same operation over and over very quickly, unlike PC microprocessors, which tend to skip all over the place.”

Architecturally, the CPU is composed of only few cores with lots of cache memory that can handle a few software threads at a time. In contrast, a GPU is composed of hundreds of cores that can handle thousands of threads simultaneously. The ability of a GPU with 100+ cores to process thousands of threads can accelerate some software by 100x over a CPU alone. What’s more, the GPU achieves this acceleration while being more power-and cost-efficient than a CPU.

 



This section continues in the Subscriber's Area. Back to top
March 23 2015

Commentary by Eoin Treacy

Eisai Shares Jump Most on Record on Alzheimer Drug Data

This article by Kanoko Matsuyama for Bloomberg may be of interest to subscribers. Here is a section: 

Eisai Co.’s shares had their biggest gain on record after partner Biogen Idec Inc.’s experimental drug for Alzheimer’s slowed progression of the disease in an early-stage study.

The Japanese drugmaker’s shares climbed as much as 21 percent to 8,748 yen in Tokyo trading today, headed for the largest gain since Bloomberg started tracking the data in 1974.The benchmark Topix Index rose 0.5 percent.

Biogen’s drug BIIB037 reduced beta amyloid, a protein fragment, in the brains of Alzheimer’s patients. It also cut cognitive decline, with higher doses and longer treatment resulting in increased improvement in an early-stage trial of 166 patients announced on March 20.

Eisai has an option to co-develop and co-promote BIIB037 with Biogen. The two companies are likely to equally split profits if the drug is successful in the last-stage trial as part of their Alzheimer’s disease collaboration, Thomas Wei, an equities analyst at Jefferies Group LLC, said in a note to clients.

 

Eoin Treacy's view -

The ability of Japan’s numerous world class companies to deliver in an increasingly competitive global economy has been questioned over the last decades as economic malaise sapped investment in R&D and risk takers were excluded from board rooms. However, if Abenomics has succeeded in anything it is to cause some reassessment of Japan’s ability to reinvent itself. 



This section continues in the Subscriber's Area. Back to top
March 20 2015

Commentary by Eoin Treacy

U.Ks FTSE 100 Rides Past Record, Reaching 7,000 for First Time

This article by Inyoung Hwang and Roxana Zega for Bloomberg may be of interest to subscribers. Here is a section: 

“U.K. stocks have had a strong rise given the headwinds,” Richard Hunter, head of equities at Hargreaves Lansdown Plc in London, said by phone. “Mining, oil and bank stocks make up a big part of the index, and we all know the difficult time these three sectors have had. Despite that, the FTSE 100 has managed to make progress.”

It’s been a good week for the benchmark: Chancellor of the Exchequer George Osborne on Wednesday unveiled higher economic growth and lower deficit and unemployment forecasts along with help for the North Sea oil industry. The latter has helped energy stocks trim declines spurred by a rout in oil and metals prices. Banking shares have been hurt by a series of scandals ranging from manipulation of interest-rate benchmarks to tax- evasion schemes.

Even with the FTSE 100 at a record, the advance in British equities this year is about a third that of gains in European peers, which was boosted by additional stimulus from the region’s central bank.

Eoin Treacy's view -

Clicking through the constituents of the FTSE-350 sector Indices section of the Chart Library, we can see that the UK stock market’s rally is well supported, It is also worth noting that the banking, resources and oil & gas sectors are no longer acting as headwinds, have all found at least near-term support this week. 

We are in the final stages of testing for the new filter system and hope to re-launch it soon. Perusing the results of this high/low filter for the FTSE-350 we can see that the majority have been trending for some time which highlights just how much of a brake the above sectors have represented for the UK stock market. 

In the table, the columns represent performance over 1 month, 3 months, 6 months, 12 months, 3-years and 5-years. It will only show data for when the respective share has hit a new high. Therefore at the top of the table you will see all the columns are filled because prices have hit new five-year highs while further down the list a share may only have hit a new 3-month high. 

 



This section continues in the Subscriber's Area. Back to top
March 19 2015

Commentary by Eoin Treacy

Radical new high-speed liquid technology could bring 3D printing into mainstream manufacturing

Thanks to a subscriber for this article from Kurzweil which may be of interest. Here is a section:  

The technology, called Continuous Liquid Interface Production (CLIP), manipulates light and oxygen to fuse objects in liquid media. It works by projecting beams of light through an oxygen-permeable window into a liquid resin to rapidly transform 3D models into physical objects.

Working in tandem, UV light, which triggers photo polymerization, interacts with oxygen, which inhibits the reaction, to control the solidification of the resin, creating commercially viable objects that can have feature sizes below 20 microns, or less than one-quarter of the width of a piece of paper. This is the first 3D-printing process that uses tunable photochemistry instead of the layer-by-layer approach that has defined the technology for decades.

Faster, stronger, predictable
CLIP enables a very wide range of materials to be used to make 3D parts with novel properties, including elastomers, silicones, nylon-like materials, ceramics and biodegradable materials, and could allow for synthesizing novel materials that can advance research in materials science.
Conventionally made 3D printed parts are notorious for having mechanical properties that vary depending on the direction the parts were printed because of the layer-by-layer approach. Much more like injection-molded parts, CLIP produces consistent and predictable mechanical properties, smooth on the outside and solid on the inside, the company says.

“By rethinking the whole approach to 3D printing, and the chemistry and physics behind the process, we have developed a new technology that can create parts radically faster than traditional technologies by essentially ‘growing’ them in a pool of liquid,” said Joseph M. DeSimone, professor of chemistry at University of North Carolina-Chapel Hill and of chemical engineering at North Carolina State and CEO of Carbon3D, who co-invented the method.

 

Eoin Treacy's view -

It’s not difficult to get excited when you look at the pace of technological innovation. The above invention has been featured on CNBC with someone attempting to print an AR-15 which shows the negative connotations of the development. Setting that example aside, this represents an important step towards having a practical tool in one’s home but there are more important considerations from an investment perspective. 



This section continues in the Subscriber's Area. Back to top
March 12 2015

Commentary by Eoin Treacy

Tesla Hackers Show an Energy Revolution Closer Than Once Thought

This article by Matthew Campbell, Tim Loh and Mark Chediak for Bloomberg may be of interest to subscribers. Here is a section:  

Consider the crash effort at the Joint Center for Energy Storage Research in suburban Chicago. Within five years, researchers want to create one or more battery types that can “store at least five times more energy than today’s batteries at one-fifth the cost,” according to George Crabtree, an agreeable silver-haired scientist who runs the U.S. Energy Department-backed battery-research skunk works.

Harvard University, the Massachusetts Institute of Technology, leading-edge technology companies like Elon Musk’s Tesla Motors Inc. and scads of startups are getting into the act. Some are seeking to double the capacity and dramatically cut the costs of the lithium-ion battery, the standard in iPhones and electric vehicles. Others are working on mega-scale battery systems using novel chemistries that could cheaply store enough energy to help power entire cities.

Battery entrepreneurs have begun to even talk like revolutionaries. “The ability for a battery company to change the dynamics of the world is what has got us excited,” says Bill Watkins, chief executive officer of Imergy Power Systems Inc., a Fremont, California, startup working on utility-scale batteries. “We can actually make a big difference here. I call it democratizing energy.”

As the former CEO of Seagate Technology Plc, the Silicon Valley digital storage maker, Watkins can speak from experience about tectonic technology shifts. In 1980, a Seagate five- megabyte hard drive that rendered floppy disks obsolete was a $1,500 PC add on. These days, drives holding two terabytes of data -- equivalent to two million megabytes --  can be had for a retail price of under $200.

What’s primarily driving the battery revolution is the phenomenal growth of rooftop and other forms of solar energy and an awakening by renewable energy advocates that storage is the lagging piece of the transformative puzzle. Solar now powers the equivalent of 3.5 million American homes and accounted for 34 percent of all newly installed electricity capacity last year.

Wind supplies enough electricity for the equivalent of about 14.7 million U.S. homes, about the same as 52 coal-powered generating plants, according to the Wind Energy Foundation.
An exponential breakthrough in battery capacity and cost would bulldoze the limitations to adopting renewable energy on a massive scale, be a potent weapon to fight climate change by lowering carbon emissions and potentially bring billions of dollars in profits, never mind fame, to the winners. The knock on renewables is that while fossil fuels keep the power on all the time, solar fades when the sun doesn’t shine and wind power fizzles when the wind doesn’t blow – unless you have a way to store the excess for when you need it.

“What’s holding back solar and wind isn’t their availability but the fact that the technology to generate renewable energy has lept far ahead of the capacity to store and deploy it round the clock as needed,” says Crabtree of the Joint Center project, which is run out of the federal Argonne National Laboratory.

Prophesies of energy revolutions always come with caveats, of course, and some researchers note that an exponential breakthrough in battery storage and cost has been forecast for more than a decade and still hasn’t arrived. “Of all these other battery technologies people promote, how many of them are real?” says Jeff Dahn, a professor at Dalhousie University in Nova Scotia who continues to plug away at making stronger and cheaper lithium-ion batteries. “All that remains to be seen.”

 

Eoin Treacy's view -

When we first started writing about the massive investments in battery technology as early as 2010 there was a great deal of enthusiasm about how batteries were going to make the case for renewable energy more compelling than ever. However, the difficulty of innovating in the chemical sector and the lead time in bringing new methodologies to market was underestimated. 



This section continues in the Subscriber's Area. Back to top
March 06 2015

Commentary by Eoin Treacy

Factories Are Building a Robot Nation

This article from Caixin may be of interest to subscribers. Here is a section: 

"At first, robots replaced workers who had jobs that exposed them to pollution, such as painting, or required that they repeat the same task," the equity manager said. "But gradually, robots have been used for trades requiring skilled workers, such as welders, because they are cost-effective."

Yet some companies have automated their factories simply because they cannot find enough people. A mid-level manager at an electronic manufacturer said that many businesses that are unable to fill positions have had no choice but to install robots.

"Workers quit every day," he said. "Physically challenging jobs under harsh conditions or jobs requiring repetitive processes are much less attractive to young workers than the older generation."

Zhang Fan, who oversees automation at a Midea factory in Wuhu, in the eastern province of Anhui, said the plant installed one robot in 2011 and another in 2012 to rapidly move 70 kilogram air conditioners on an assembly line – a job that was too strenuous for people.

 

Eoin Treacy's view -

China can no longer compete with some of its neighbours as a low cost manufacturing environment. Highly labour intensive, thin margin businesses such as textiles and jewellery manufacture have already migrated to countries like Vietnam, Cambodia, Indonesia and increasingly India and Africa. Some of the larger Chinese families will have operations in all of these countries as they manage their exposure to labour costs. 



This section continues in the Subscriber's Area. Back to top
March 05 2015

Commentary by Eoin Treacy

Top 10 Emerging Technologies of 2015

This article from the Scientific American may be of interest to subscribers. Here is a section:

Neuromorphic technology
Computer chips that mimic the human brain

Even today's best supercomputers cannot rival the sophistication of the human brain. Computers are linear, moving data back and forth between memory chips and a central processor over a high-speed backbone. The brain, on the other hand, is fully interconnected, with logic and memory intimately cross-linked at billions of times the density and diversity of that found in a modern computer. Neuromorphic chips aim to process information in a fundamentally different way from traditional hardware, mimicking the brain's architecture to deliver a huge increase in a computer's thinking and responding power.

Miniaturization has delivered massive increases in conventional computing power over the years, but the bottleneck of shifting data continuously between stored memory and central processors uses large amounts of energy and creates unwanted heat, limiting further improvements. In contrast, neuromorphic chips can be more energy efficient and powerful, combining data-storage and data-processing components into the same interconnected modules. In this sense, the system copies the networked neurons that, in their billions, make up the human brain.

Neuromorphic technology will be the next stage in powerful computing, enabling vastly more rapid processing of data and a better capacity for machine learning. IBM's million-neuron TrueNorth chip, revealed in prototype in August 2014, has a power efficiency for certain tasks that is hundreds of times superior to a conventional CPU (central processing unit), and more comparable for the first time to the human cortex. With vastly more computing power available for far less energy and volume, neuromorphic chips should allow more intelligent small-scale machines to drive the next stage in miniaturization and artificial intelligence.

Potential applications include: drones better able to process and respond to visual cues, much more powerful and intelligent cameras and smartphones, and data-crunching on a scale that may help unlock the secrets of financial markets or climate forecasting. Computers will be able to anticipate and learn, rather than merely respond in preprogrammed ways.

Eoin Treacy's view -

IBM was a major contributor to the above article and as a result it mentions a number of areas where the company has a competitive advantage. We have all marvelled at the ability of its Watson program to compete against humans in real life tests of mental agility and at the company’s continued ability to develop cutting edge technology. However there has been a gap between development and delivery that has resulted in a lacklustre performance.



This section continues in the Subscriber's Area. Back to top
March 03 2015

Commentary by Eoin Treacy

Nasdaq 5,000: Bubble or not?

Thanks to a subscriber for this discussion from CNBC highlighting the fact that big round numbers are where investors tend to take stock of where a market is likely to go next. Here is a section quoting portions of the transcript: 

The Nasdaq wouldn't be here if not for quantitative easing. It wouldn't be here without zero percent interest rates. It wouldn't be here without unprecedented stock buybacks fueled by cheap money," Peter Schiff, CEO of Euro Pacific Capital, told CNBC. "You have all these artificial props which have lifted up the market and there's no way to sustain the market without those props."

The Nasdaq index last touched 5,000 in March of 2000, marking the peak of the dotcom bubble's euphoria -- or what some called hysteria -- before the index crashed around 80 percent to a nadir of 1108.49 in October of 2002. It's been a long climb back to its 5008.096 close on Monday.
What bubble?

But not everyone is convinced dotcom euphoria is making a revival. "I'm not a perma-bull. I'm very interested in shorting overhyped, overvalued stocks," Wayne Kaufman, chief market analyst at Phoenix Financial, told CNBC, citing bets against GoPro and Tesla. "I don't believe we are in a bubble and I think the fundamentals bear that out," he said, citing then-and-now data.

 

Eoin Treacy's view -

The Nasdaq Composite tested the psychological 5000 on Friday and is somewhat overextended relative to the 200-day MA. In addition to being a big round number this level is also in close proximity to the Index’s all-time high and is a logical place investors would pause and take stock, not least because the stock market has been rallying since 2009. 



This section continues in the Subscriber's Area. Back to top
February 24 2015

Commentary by Eoin Treacy

Postal Savings Bank of China chases Pre-IPO investors

This article from the Financial Times may be of interest to subscribers. Here is a section: 

High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/5ccec596-b947-11e4-a8d0-00144feab7de.html#ixzz3SdAcm0uo

Postal Savings Bank is a fixture in rural China, where its network scoops up deposits from rural households. It has as much as $800bn in deposits, and puts its money into Chinese government bonds and the interbank market as well as lending to small and medium-sized enterprises and agricultural households.

Its branch network of about 40,000 is larger than more widely known state-owned banks, such as Industrial and Commercial Bank of China.

“It is a true and pure savings bank,” said the head of one Chinese investment fund that is considering buying a stake. “Its ability to collect deposits is very, very strong and because it doesn’t have a huge loan book, the overall risk is very, very low. But to turn it into a new retail bank may be way too difficult.”

Among the more interesting possible investors is Ant Financial, an affiliate of Alibaba, the US-listed ecommerce group. Alibaba already has a partnership with the International Finance Corporation, the private sector arm of the World Bank, to offer micro finance services in China. It could use the Postal Saving’s Bank’s cheap funding as a way to extend its financial muscle in the country.

 

Eoin Treacy's view -

Alibaba has been perhaps the most proactive of the globally significant technology companies in pursuing a dominant role in the financial services sector. Its Ali Pay service has allowed it to circumvent rules the major banks have to follow in terms of the deposit rates they can pay. This is achieved by leveraging the popularity of its online properties to attract customers. It is arguable whether tying up with a retail branch network is the most effective use of capital when the payments sector is increasingly online.  



This section continues in the Subscriber's Area. Back to top
February 19 2015

Commentary by Eoin Treacy

Technology at Work - Stock Beneficiaries on the Advance of Automation

This is a really great report from Citi focusing on the beneficiaries of automation and the increasing pace of technological innovation. I recommend downloading it now even if you plan to revisit it later. Here is a section: 

The Pace of Technological Change
Firstly, the pace of technological change has accelerated and now risks outpacing labour’s ability to adapt. It took 119 years for the spindle to diffuse outside Europe. By contrast the Internet spread across the globe in only seven years. Technology, connectivity and globalization have accelerated the rate of change in innovation. In 1980 one billion people were integrated into the global economy compared to 6 billion today. In 2011, when Facebook analysed their users, they found on average there were only 4.7 degrees of separation between any two users anywhere in the world. Crowd sourcing and crowd funding have also helped spur innovation. Start up speed and costs have also been aided by the advent of cloud computing where costs have been falling at c.50% every three years since 2006. The ability to collect and analyse data now often happens in real time, allowing firms to adjust offerings dynamically. The impacts on innovation are being seen across multiple industries, from newspapers to taxis, music to TV cord cutting and peer-to-peer lending to mobile payments. The GPS report shows a significant amount of innovation and change is happening in the fields of automation and robotics.

The Scope of Technological Change
Secondly, the scope of technology change is increasing. A big data revolution, increased connectivity and machine learning algorithm improvements mean that more occupations are at risk of being substituted by technology, including tasks once thought quintessentially human such as navigating a car or deciphering handwriting. Carl Benedict Frey and Michael Osborne's study predicts 47% of US jobs are at risk of computerisation. With the caveat that measurement problems exist when comparing countries, further studies of jobs at risk outside the US have found 35% of UK jobs and 54% of EU jobs are at risk. By US industry, employment in agricultural, management and education are estimated to have a low risk of computerisation, while those most at risk include real estate (67%), transport & warehousing (75%), and accommodation & food services (87%). 

A significant part of the GPS report shows these changes are happening now. In financial services, which has an estimated higher than average 54% of US jobs at risk, we are seeing several examples of technological substitution: asset management continues to migrate from active to passive or ETF funds; new Exchange Traded Managed Funds could bring automation to the financial service distribution process; electronic trading has swept through markets such as equities, with a 50% reduction in trading headcount over the past 10 years, and could expand to other products; algorithms are being used in both high frequency trading and retail asset allocation; digital banking is reducing bank branches and staff levels; cash is also being substituted by mobile payments or digital money, where contactless payments can be over 10x quicker than cash or chip and pin payments, reducing both human time and errors.

 

Eoin Treacy's view -

A link to the full report is posted in the Subscriber's Area.

The pace of technological innovation is such that change is happening faster than most people are comfortable with. One of the reason’s my wife and I picked the school we did for our kids is because they have a heavy focus on technology and our kids will be learning to program Python from age 10. 

Perhaps the most underappreciated benefit of the internet is in its role of connecting likeminded individuals who can help each other further innovative research. This means that as computing power becomes faster and more available that there is no logical limit to the extent of innovation. There will be winners and losers. Obviously non skilled workers are at risk while mass employers may benefit from innovation. 

 



This section continues in the Subscriber's Area. Back to top
February 18 2015

Commentary by Eoin Treacy

Gilead Pill Can Stop HIV. So Why Does Almost Nobody Take It?

This article by Caroline Chen for Bloomberg may be of interest to subscribers. Here is a section: 

Truvada, Gilead’s HIV drug, has been approved since 2004 for people with the virus. In 2012, use was expanded to people without HIV as a way of preventing transmission -- a practice called PrEP, or pre-exposure prophylaxis. Taken daily, it can prevent infections 92 percent of the time, meaning it could drastically reduce new infections in sexually active gay men, among the U.S.’s highest-risk communities.

Thanks to its use in HIV patients, Truvada’s been a financial success, bringing Gilead $1.79 billion in the U.S last year. Yet out of 3.3 U.S. million prescriptions from January 2012 to March 2014, only 3,200 were for prevention.

There are many reasons: Gilead says PrEP isn’t a moneymaker, so the drugmaker doesn’t pitch the medicine to many of the primary care doctors who see healthy, HIV-negative gay men most likely to benefit from Truvada. Patients and advocates say doctors often don’t know about the medicine, and some insurance plans leave patients with copays as high as $1,300, making use by the healthy less affordable.

The result is thousands of people who could significantly lower their HIV risk, yet don’t. Some 50,000 Americans are diagnosed with HIV each year, with the highest rates among young gay males, according to the U.S. Centers for Disease Control and Prevention.

Yet in November, Gilead said that 42 percent of PrEP prescriptions written through March 2014 were for women, and only 7.4 percent were for men younger than 25.

 

Eoin Treacy's view -

The list of caveats that come with this description of Truvada’s characteristics should give anyone pause. However the people it is aimed at helping do not have the best record of adopting a cautious lifestyle when it comes to the trade-off between pleasure and well-being, not least because many are young men. 

Taking a step back, the commercialisation of such a drug requires a very long lead time. This explains why after the fizz of the Tech Bubble it took so long for the promises of innovation to come to fruition. One of the reasons that biotechnology is such a booming sector today is that a number of important products have reached the commercialisation stage. 



This section continues in the Subscriber's Area. Back to top
February 18 2015

Commentary by Eoin Treacy

Portland to generate electricity within its own water pipes

This article by Ben Coxworth for Gizmag may be of interest to subscribers. Here is a section: 

LucidPipe simply replaces a stretch of existing gravity-fed conventional pipeline, that's used for transporting potable water. As the water flows through, it spins four 42-inch (107-cm) turbines, each one of which is hooked up to a generator on the outside of the pipe. The presence of the turbines reportedly doesn't slow the water's flow rate significantly, so there's virtually no impact on pipeline efficiency.

The 200-kW Portland system was privately financed by Harbourton Alternative Energy, and its installation was completed late last December. It's now undergoing reliability and efficiency testing, which includes checking that its sensors and smart control system are working properly. It's scheduled to begin full capacity power generation by March.

Eoin Treacy's view -

This represents an innovative idea but is just one example of how technological innovation is enhancing productivity. LucidPipe is privately held but the video on their homepage is worth watching just for the sheer simplicity of the concept and the benefit that accretes to the user of the technology. 



This section continues in the Subscriber's Area. Back to top
February 16 2015

Commentary by Eoin Treacy

Hacked vs. Hackers: Game On

This article by Nicole Perlroth for the New York Times may be of interest to subscribers. Here is a section: 

While much progress is being made, security experts bemoan that there is still little to prevent hackers from breaking in in the first place.

In May, the F.B.I. led a crackdown on digital crime that resulted in 90 arrests, and Robert Anderson, one of the F.B.I.’s top officers on such cases, said the agency planned to take a more aggressive stance. “There is a philosophy change. If you are going to attack Americans, we are going to hold you accountable,” he said at a cybersecurity meeting in Washington.

Still, arrests of hackers are few and far between.

“If you look at an attacker’s expected benefit and expected risk, the equation is pretty good for them,” said Howard Shrobe, a computer scientist at the Massachusetts Institute of Technology. “Nothing is going to change until we can get their expected net gain close to zero or — God willing — in the negative.”

Until last year, Dr. Shrobe was a manager at the Defense Advanced Research Projects Agency, known as Darpa, overseeing the agency’s Clean Slate program, a multiproject “Do Over” for the computer security industry. The program included two separate but related projects. Their premise was to reconsider computing from the ground up and design new computer systems that are much harder to break into and that recover quickly when they have been breached.

“ ‘Patch and pray’ is not a strategic answer,” Dr. Shrobe said. “If that’s all you do, you’re going to drown.”

 

Eoin Treacy's view -

The first experience many of the world’s emerging consumers will have of banking will be online. Many emerging markets do not have the retail branch network we are accustomed to in the West and the cost of building one versus installing an online system means they may never exist. As banking, retail, wholesale, entertainment, groceries and other parts of our lives move further online and become increasingly mobile, the need to protect our personal data is a growing imperative. 

At last week’s talk to potential investors in the FP WM Global Corporate Autonomies Fund, it was a pleasure to meet up again with David Brown. He took me through a brief summary of the presentation he will be giving at the Markets Now event on the 23rd. Quite simply if I were in London on the 23rd I wouldn’t miss this talk. It will offer a unique perspective on the evolution of the Third Industrial Revolution, where we are in the cycle, and what to expect next. Here is a link to his bio

 



This section continues in the Subscriber's Area. Back to top
February 05 2015

Commentary by Eoin Treacy

American Advanced Industries What They Are, Where They Are, and Why They Matter

I watched a series of panel discussions this morning at the Brookings Institute featuring the CEOs of Siemens, Alcoa, Stanley Black & Decker and Paccar among others. While I do not know if these talks were recorded and will available for viewing later I thought subscribers might be interested in the associated report. Here is a section

In short, the advanced industries sector—defined by its deep investment in R&D and STEM workers—encompasses the nation’s highest-value economic activity. As such, these industries are the country’s best shot at innovative, inclusive, and sustainable growth.

But there is a problem. The future competitiveness of the U.S. advanced industries sector is uncertain. Competitor nations are accelerating their investments in research and development (R&D), STEM workers, and strong regional technology ecosystems just as the U.S. commitment weakens. As a result, recent decades have seen large-scale losses of manufacturing jobs and a growing trade deficit even in advanced technology products. At the same time, the national government remains locked in partisan paralysis when it should be providing a platform for renewal. Going forward, a new alignment of states, cities, and metropolitan areas—and regional networks of public, private, and civic institutions—is going to be needed to transcend Washington’s paralysis and make advanced industry competitiveness a top priority.

And so, at a moment of uncertainty about the sources of U.S. economic renewal, this report urges the nation to double down on the advanced industries sector as one component of future prosperity. The report first explains what the advanced industries are and why they matter. It then explores the size, nature, and geography of the advanced industries sector, with particular attention to its distribution across U.S. metropolitan areas. It describes both the strength of the sector in the United States and a number of challenges that are undercutting its international competitiveness. Finally, the report suggests several priority areas for private- and public-sector work to promote the sector’s growth. 

Ultimately, the main point is simple: A competitive and growing advanced industries sector is prerequisite any future broadly shared prosperity. The nation should place a high priority on revitalizing them. 

 

Eoin Treacy's view -

A link to the full report is posted in the Subscriber's Area.

While the above paragraphs sound a cautionary note, listening to the CEOs of major engineering companies can’t but fill one with enthusiasm about the pace of innovation and the beneficial effect this will have on consumers and not just in the USA. 

There is little doubt that education needs to focus on encouraging students into more highly skilled jobs. Just about all unskilled manufacturing that could be sent to cheaper labour markets has been. Manufacturing in the 21st century is increasingly about working in conjunction with robots and advanced pieces of machinery and software. This is not new, people have been talking about the need for enhanced technical schooling for a long time but the number of jobs available in these sectors now means that there is a clear progression for graduates to comparatively high paying jobs. 

 



This section continues in the Subscriber's Area. Back to top
February 03 2015

Commentary by Eoin Treacy

Indian e-Commerce

Thanks to a subscriber for this topical report from Deutsche Bank which may be of interest. Here is a section: 

India in a nutshell: India is a large emerging market in terms of population and formal retail is still underpenetrated. E-Commerce spend today is mostly in online travel and future growth of B2C e-tail (physical goods) is likely to be driven by large, well-funded competitors who can speed up online adoption. The key risk is how quickly profitability arrives given the size of the market, the intensity of competition, and consumer behavior. Market estimates1 put the current and future size of the Indian e-commerce market at only 3% to 7% of Chinese levels, with significant upside through consumer adoption. 

Formal retail under-penetrated in India: Market estimates2 put the size of the Indian retail market at cUS$350bn, but formal retail at only 5% of that total.

E-commerce nascent but growing: Market estimates3 look for the overall ecommerce market to grow from US$22bn in 2014 to US$86bn in 2018 (40% CAGR). Within just B2C e-tail, estimates are for expansion from cUS$4bn in 2014 to cUS$18bn by 2018 (45% CAGR).

E-commerce to target the wealthier demographics: c60m households (c25% of the overall population) in India control c60% of retail spend in 2015E; these households are forecast to double in absolute numbers by 2025, with spending power to triple over the same period. Wealth concentration and limited broadband penetration (c11%) could potentially create a two-tier market: 1) wealthy cohorts, where online spend centers on consumer discretionary items (electronics, clothes, etc) and where the longer-term opportunity is in migrating their online spend to include consumer staples (diapers, consumables, food), and 2) the mass-market, where spend levels are likely to be lower but increasing mobile penetration, a lack of formal retail/alternatives, and sheer numbers could prove formidable over time.

Low internet penetration but high growth: Less than 20% of the population had internet access in 2013 (214m) but this figure looks set to grow to c500m by 2018 (c36%), driven by mobile internet penetration leapfrogging desktop5 

Market cap per internet user is low: In Western markets, the market cap for the e-commerce sector on a per internet user basis is nearly 15x that of India. The ratio is nearly as stretched even when compared with similar emerging markets such as APAC, where the e-commerce market cap on a per user basis is nearly 10x that of India. This indicates the huge opportunity left for ecommerce penetration and growth in India. As discussed, India has over 200m internet users but less than 10% of those users purchase online. In the next few years (and decades), more retail spend is likely to shift online, closing the gap with its global peers.

 

Eoin Treacy's view -

A link to the full report is posted in the Subscriber's Area. 

As China’s e-tail companies make large public splashes in the international markets, the question of where India’s online champions are is a relevant one. The country has a similar population size to China but its infrastructure and openness to foreign investment and joint ventures lags far behind its neighbour. Nevertheless as broadband access improves, smartphone penetration increases and online banking spreads the potential for online retailing to take off just as it has elsewhere is high. 



This section continues in the Subscriber's Area. Back to top
February 03 2015

Commentary by Eoin Treacy

MakerBot 3D printer used to create tracheal cartilage

This article by Chris Wood for Gizmag may be of interest to subscribers. Here is a section: 

Printing a 2-inch (5 cm) long section of windpipe takes less than two hours, after which it needs to be placed in a bioreactor, which acts like a rotisserie – keeping the cells at optimum temperature while allowing them to grow evenly.

In order to avoid the high cost of purchasing a new bioreactor (between US$50,000 and $150,000), Goldstein once again resorted to 3D printing, using the MakerBot printer to make gears and other parts, converting an incubator to suit the needs of the project.

The results of the research are promising, with Goldstein stating that, "The cells survived the 3D printing process, were able to continue dividing, and produced the extracellular matrix expected of tracheal chrondrocytes."

While further study is required before the research can be put into practice, it has the potential to change the face of tracheal surgery. The impact will be particularly significant for pediatric applications, as the graft’s biological nature allows the patient to grow, removing existing limitation in regard to the physical length of reconstruction. Additionally, the method can also be used to create a branching bioprosthesis, making it viable for surgery on the tracheal carina and bronchi.

 

Eoin Treacy's view -

The 3-D printing industry is a prime example of how technological innovation is accelerating at a prodigious rate and yet investors need to be cautious about how they participate. 

The Makerbot machine used in the above experiment costs $2000. When I first started writing about 3-D printers nearly five years ago the cost of a similar sized machine was closer to $100000 and it would not have had the same ability to customise the output. The speed with which this sector has grown is mind boggling. The results of rapid prototyping, such as that detailed above, have the capacity to improve services offered by the medical sector in particular beyond recognition. 

 



This section continues in the Subscriber's Area. Back to top
February 02 2015

Commentary by Eoin Treacy

New Rules in China Upset Western Tech Companies

This article by Paul Mozur may be of interest to subscribers. Here is a section: 

The groups, which include the U.S. Chamber of Commerce, called for “urgent discussion and dialogue” about what they said was a “growing trend” toward policies that cite cybersecurity in requiring companies to use only technology products and services that are developed and controlled by Chinese companies.

The letter is the latest salvo in an intensifying tit-for-tat between China and the United States over online security and technology policy. While the United States has accused Chinese military personnel of hacking and stealing from American companies, China has pointed to recent disclosures of United States snooping in foreign countries as a reason to get rid of American technology as quickly as possible.

Although it is unclear to what extent the new rules result from security concerns, and to what extent they are cover for building up the Chinese tech industry, the Chinese regulations go far beyond measures taken by most other countries, lending some credibility to industry claims that they are protectionist. Beijing also has long used the Internet to keep tabs on its citizens and ensure the Communist Party’s hold on power.

Chinese companies must also follow the new regulations, though they will find it easier since for most, their core customers are in China.

 

Eoin Treacy's view -

China has unabashed ambitions of becoming a global economic and military superpower large enough to rival the USA. However if it is to close the technological gap with the USA it will have to invest a great deal of money, time and effort into technological development. Investment in science is already impressive but the commercialisation of ideas takes time. 

Like other emerging countries that have come before it, China has copied what it could not develop itself. Insisting companies that wish to do business in China to sign technology sharing agreements and engaging in corporate espionage are both aimed at achieving the goal of rapidly narrowing technological gaps.

Forcing government agencies and state owned companies to buy from Chinese vendors almost certainly sets the country on course for discourse with the WTO. However by the time a judgement is reached much of the transition will probably have been completed.  The majority of China’s leading technology companies have sought listings in either Hong Kong or the USA which creates a challenge when judging the performance of the sector. 

 



This section continues in the Subscriber's Area. Back to top
January 26 2015

Commentary by Eoin Treacy

3 Myths That Block Progress For The Poor

The 2014 report from the Bill and Melinda Gates Foundation may be of interest to subscribers. Here is a section: 

You might think that such striking progress would be widely celebrated, and that people would rush to figure out what is working so well and do more of it. But they’re not, at least not in proportion to the progress. In fact, I’m struck by how few people think the world is improving, and by how many actually think the opposite—that it is getting worse.

I believe this is partly because many people are in the grip of several myths—mistaken ideas that defy the facts. The most damaging myths are that the poor will remain poor, that efforts to help them are wasted, and that saving lives will only make things worse.

I understand why people might hold these negative views. This is what they see in the news. Bad news happens in dramatic events that are easy for reporters to cover: Famine suddenly strikes a country, or a dictator takes over someplace. Good news—at least the kind of good news that I have in mind—happens in slow motion. Countries are getting richer, but it’s hard to capture that on video. Health is improving, but there’s no press conference for children who did not die of malaria.

The belief that the world is getting worse, that we can’t solve extreme poverty and disease, isn’t just mistaken. It is harmful. It can stall progress. It makes efforts to solve these problems seem pointless. It blinds us to the opportunity we have to create a world where almost everyone has a chance to prosper. 

If people think the best times are in the past, they can get pessimistic and long for a return to the good old days. If they think the best times are in the future, they see things differently. When science historian James Burke wrote about the Renaissance in The Day the Universe Changed, he pointed to one source for many of the advances that happened in that amazing period: the shift from the belief that everything was decaying and getting worse to the realization that people can create and discover and make things better. We need a similar shift today, if we’re going to take full advantage of the opportunity to improve life for everyone.

 

Eoin Treacy's view -

A link to the full report is posted in the Subscriber's Area.

Apart from its deep pockets the Gates Foundation sets itself apart by exuding a sense of optimism that the problems affecting large portions of the global population can be solved within our lifetimes. The rise of China and India has already lifted a billion people out of abject poverty and improving governance is likely to achieve a similar feat in the next decade for even more countries. 



This section continues in the Subscriber's Area. Back to top
January 23 2015

Commentary by Eoin Treacy

Review of the FTSE 350

Eoin Treacy's view -

The ECB’s massive QE program will put pressure on the BoE to delay any plans it may have had to raise short term interest rates. Along with its own easy monetary policy, the prospect of recovering demand on mainland Europe should be a positive for the UK’s economy and it may also be subject to additional capital flows since not all the money created by the ECB will stay inside the Eurozone. 

I thought it might be an opportune time to look at the FTSE 350 since its constituents may be among the beneficiaries of ECB largesse. The Index has surged over the last two weeks to retest its peak and a while some consolidation is possible in the current area a sustained move below 3500 would be required to question medium-term scope for additional upside. 

I clicked through the constituents of the FTSE 350 this morning and also created a section for the FTSE All Share REIT Index in the Chart Library. Here is a link to an Excel sheet of the FTSE350’s constituents ranked by sector then by market cap. 
Among Autonomies:

In the banking sector HSBC (Est P/E 10.65, DY 5.27%) has firmed in the region of 600p. It is now testing the 200-day MA and a sustained move below 600p would be required to question potential for additional upside.  

 



This section continues in the Subscriber's Area. Back to top
January 21 2015

Commentary by Eoin Treacy

Nanobot micromotors deliver medical payload in living creature for the first times

This article by Colin Jeffrey for Bloomberg may be of interest to subscribers. Here is a section: 

Reaching speeds of up to 60 micrometers per second, the nanobots headed outwards toward the stomach lining where they then embedded themselves, dissolved, and delivered a nanoparticle compound directly into the gut tissue.

According to the researchers, of all the nanobots deployed in the stomach of the mouse, those that reached the stomach walls remained attached to the lining for a full 12 hours after ingestion, thereby proving their effectiveness and robust nature.

Further, after the mouse was eventually euthanized and the stomach was dissected and examined, the presence of the nanobots also showed no signs of raised toxicity levels or tissue damage. According to the researchers this was in line with their expectations, particularly given that zinc is effectively also a multipurpose nutrient.

While nanobots have been used before on organic tissue – such as in the destruction of the Hepatitis C virus – and still others have been designed to be propelled using external forces within a living creature, the University of California micromachines are the very first self-propelled, nanoparticle delivering nanobots ever. And it is this fact that makes the research team believe that its success so far merits further research and cites the fact that this is now the beginning of a proven method to deliver targeted drug administration.

 

Eoin Treacy's view -

The commercialisation of nanobots remains a long way off but the prospect of managing dosages, particularly in the case of chemotherapy etc. represents a major innovation capable of transforming treatment. 



This section continues in the Subscriber's Area. Back to top
January 16 2015

Commentary by Eoin Treacy

Israel Sows Cyber Hub in Desert to Make Beersheba Bloom

This article by Gwen Ackerman for Bloomberg may be of interest to subscribers. Here is a section: 

“No other region in the world has a perfect storm like Israel in general, and Beersheba specifically,” said Yoav Tzruya, partner in JVP Cyberlabs in Beersheba.

JVP’s technology-development center in Jerusalem spawned companies such as the cloud-encryption firm Navajo, which was bought by Salesforce.com Inc. in 2011. The venture firm went as far as South Korea seeking a second location before settling on Beersheba. Key reasons included the government and military investment in the region, Tzruya said.

As the region gears up to become an anti-hacking center, an Internet security-focused high school is in the works, as is a second hospital and more residential neighborhoods amid expectations that the Negev population will jump from today’s , about 610,000, to about a million by 2020.}

“Economic development, if it works well, is sort of like being a fan of the football team,” said Erel Margalit, a Labor lawmaker, head of the lobby for the Negev and founder of JVP. “It unites everyone in a big message of growth.”

 

Eoin Treacy's view -

Israel doesn’t have the regulatory framework precluding companies from taking proactive measures against hackers. In tandem with the close ties its technology sector has with the military the potential to build a world class cyber security centre of excellence is credible. 
One of the challenges for the Israeli market is that the country’s most significant cyber security firms are not listed in Israel. 



This section continues in the Subscriber's Area. Back to top
January 08 2015

Commentary by Eoin Treacy

Toyota opens fuel cell patents to drive "hydrogen society"

This article by C.C. Weiss for GizMag may be of interest to subscribers. Here is a section: 

Toyota hopes to help jumpstart this future hydrogen society by sharing its intellectual property. This week's announcement represents the first time that it's sharing patents free of charge. The automaker helped to grow the gas-electric hybrid market in a similar manner, but those licensed technologies didn't come free.

"At Toyota, we believe that when good ideas are shared, great things can happen," said Bob Carter, senior VP of automotive operations at Toyota Motor Sales, USA Inc. "The first generation hydrogen fuel cell vehicles, launched between 2015 and 2020, will be critical, requiring a concerted effort and unconventional collaboration between automakers, government regulators, academia and energy providers. By eliminating traditional corporate boundaries, we can speed the development of new technologies and move into the future of mobility more quickly, effectively and economically."

 

Eoin Treacy's view -

I wonder if falling oil prices had any impact on Toyota’s decision to open its patent portfolio for hydrogen-fuelled vehicles to the masses? After all one of the most compelling reasons for considering alternative fuel vehicles was the high cost of gasoline. The technology has come a long way in the last twenty years and governments are now more amenable to emission free technologies because of environmental concerns. However the total cost of ownership is likely to continue to be the primary arbiter for the majority of car buyers. 



This section continues in the Subscriber's Area. Back to top
January 07 2015

Commentary by Eoin Treacy

Email of the day on gold, oil and shorting opportunities

I'm finding the current moves in the dollar versus gold to be fascinating. Usually, if the dollar is going up, gold goes down in dollar terms (almost as if gold is a currency, hmm). Right now, both are going up, which of course means gold is really going up in non-USD currencies... suggesting that demand is quite strong.

I'm short again, market-wise... shorted QQQ this morning... so many of the big stocks have made lower highs and lower lows (AAPL, CAT....) and others, (F, SBUX, DE) have 1 or the other. The QQQ now has both. Even the transports (IYT) look toppy to me. Of course the price action will tell...

Lol, this morning oil had a 5 hour rally, which the bobbing heads on TV claim is a bottom... of course it's dropped 1.60 in the past hour or so. Reducing drilling plans for next year does not shut down the rigs currently completing wells (rig count is still not dropping - it will, but these things take a lot of time). Short term, everything still points to increasing supply in the next few months. 

As always, your comments would be greatly appreciated :)
Hope all is well...

 

Eoin Treacy's view -

Thank you for your kind words and this informative email. In an environment where almost every central bank, with the notable exception of the Fed, is increasing supply of fiat currency, the relative attraction of gold tends to be burnished. In many respects deflation is a more bullish factor for gold than inflation since it is less likely to have to compete with higher yielding assets.

For example, while gold experienced a deep decline in US Dollar terms over the last few years it has been confined to a range when redenominated to Yen which has been among the weakest currencies. While gold is holding steady relative to weak currencies it will a more convincing bullish catalyst to reignite medium-term demand dominance against the US Dollar. 
 



This section continues in the Subscriber's Area. Back to top
January 02 2015

Commentary by Eoin Treacy

Email of the day on technological innovation and drug resistance

Solving the problem of drug resistant bacteria may be closer than you think.  Journalist Brendan O’Neill recently reported: 

“Ninja particles are as cool as they sound. As part of the explosion of research into nano¬medicine — the implanting of infinitesimal machines or microbes into the body to attack disease — researchers have developed synthetic molecules that mimic our immune systems. It’s hoped these man-made molecules will soon be sent into the human body to attach themselves to certain microbes and cause them to rupture — “as if they’d been hit by an explosive shuriken (ninja star)”. These ninjas could prove deadly against antibiotic-resistant bugs and in bodies whose immune systems are rejecting newly transplanted organs.  (A Hollywood fantasy in the 1980s — Dennis Quaid being shrunk and sent into a human body in Innerspace — is becoming reality.)”

The above is more evidence of the importance of technology as a driver of equity markets.  It is listed as #7 out of 10 significant technological developments in 2014.  The full article is at:  

 

Eoin Treacy's view -

Thank you for this email highlighting the fact that we live in an age of accelerating technological innovation. The pace of advances means that obsolescence is also increasing but there is an additional consideration. This is that it takes time to bring a lab discovery to market, not least because of issues with increasing scale as well as capital and regulatory constraints. It is reasonable to believe that we are rapidly entering an age of personalised medicine where the claims made by biotechnology analysts in the 1990s are being realised. However, this could take a decade or more to roll out and will come at a cost. 



This section continues in the Subscriber's Area. Back to top
December 30 2014

Commentary by Eoin Treacy

FBI Probes If Banks Hacked Back as Firms Explore Cyber Offensive

This article by Michael Riley and Jordan Robertson for Bloomberg may be of interest to subscribers. Here is a section: 

“It’s kind of a Wild West right now,” said U.S. Representative Michael McCaul, the Texas Republican who is the chairman of the House Homeland Security Committee. Some victim companies may be conducting offensive operations “without getting permission” from the federal government, he said.

“They’re very frustrated,” McCaul said of these firms. Hacking costs the global economy as much as $575 billion annually, according to a study published in June by McAfee, a security-software maker owned by Intel Corp., and the Center for Strategic & International Studies. Counterstrikes are a small part of the overall cyber-security industry, which Gartner Inc. projects will surpass $78 billion in worldwide revenue next year.

 

Eoin Treacy's view -

There is a Chinese proverb along the lines of the worst thing that can happen is if the thief knows who you are. In other words thieves can’t steal from you if they do not know you exist. The problem we have as online citizens, as a LinkedIn profile exhibits, is that we are connected in ways we might not know. All of us have an online profile in one shape of form that is equally accessible to hackers. In this environment companies represent the highest profile targets. 

The vast majority of internet security products on the market today focus on defence while a small number of government-sponsored and private companies focus on offensive strategies. It is inevitable that corporations, that feel underserved by their respective governments, will take matters into their own hands by targeting predatory groups in a proactive manner across national boundaries. 

 



This section continues in the Subscriber's Area. Back to top
December 29 2014

Commentary by Eoin Treacy

China Can Lead Fight Against Antibiotic Resistance

This cautionary article by Jim O'Neill for Bloomberg may be of interest to subscribers. Here is a section:

This danger needs to sink in. The scale of the problem, left unattended, is truly unsettling.
Infections resistant to antibiotics claim about 50,000 lives each year across the European Union and U.S. Hundreds of thousands more deaths are thought to be attributable to AMR (antimicrobial resistance ) worldwide. A low estimate of the global total might be 700,000 deaths a year -- about half as many as are caused by traffic accidents, or diabetes, or diarrheal disease. (There were an estimated 480,000 new cases of drug-resistant tuberculosis alone in 2013, most which went untreated.)

Antibiotic Resistance
By 2050, the global total of AMR-related deaths could be more than 10 times bigger, at 10 million a year. That's more than the current global toll of deaths from cancer. The economic cost would be staggering as well, at a cumulative $100 trillion, or roughly six years' worth of U.S. gross domestic product.

These shocking numbers are conservative estimates. They're based on two studies we commissioned from RAND Europe and KPMG.

The researchers looked at three bugs that you tend to catch in hospitals (E. coli, Klebsiella pneumonia and Staphylococcus aureus) and three more well-known illnesses (HIV, tuberculosis and malaria). That list is far from exhaustive. Also, the estimates don’t include indirect consequences, such as higher health-care costs or the likelihood that treatments such as surgeries and chemotherapy might become prohibitively dangerous.

We looked out as far as 2050 because this period allows us to consider the full emergence of the BRIC countries (Brazil, Russia, India and China) and their followers in the MINT group (Mexico, Indonesia, Nigeria and Turkey) as major economies. The combination of immature, inadequate health-care systems and rising incomes to spend on drugs makes them especially susceptible to the AMR threat. As the report says:

The variation in the AMR problems of individual countries is linked to huge differences in how heavily they use antimicrobial drugs. Global consumption of antibiotics in human medicine rose by nearly 40% between 2000 and 2010, but this figure masks patterns of declining usage in some countries and rapid growth in others. The BRIC countries plus South Africa accounted for three quarters of this growth, while annual per- person consumption of antibiotics varies by more than a factor of 10 across all middle and high-income countries.

In China, our research suggests that by 2050 as many as 1 million people a year could die because of AMR. The cumulative economic cost would be $20 trillion -- equivalent to two years of current Chinese output.

 

Eoin Treacy's view -

Drug resistance is a major concern but is something we do not tend to encounter unless we end up in hospital. Nevertheless, most of us know of someone who contracted such an infection at some point often as a complication to another ailment. As this article from the Cleveland Clinic highlights, there is no easy answer to drug resistant diseases.

In Europe it is often difficult to be prescribed antibiotics. In the USA, it has been our experience that a doctor will prescribe just about anything you ask. Meanwhile, the organic movement is vocally opposed to the use of antibiotics in food production. In China, strong antibiotics are often available over the counter not least because most people self- medicate.



This section continues in the Subscriber's Area. Back to top
December 23 2014

Commentary by Eoin Treacy

Tech hardware and supply chain, Ten themes to watch in 2015

Thanks to a subscriber for this detailed report from Deutsche Bank, dated December 8th, but no less relevant today. Here is a section:  

What is Big Data?
The terms Big Data and Big Data Analytics are often used interchangeably, but they differ in one fundamental way. Big Data describes the processes used to collect and store large amounts of data. A data set is generally considered big when traditional relational databases or statistical programs become difficult to work with on existing hardware platforms. When this happens, new techniques must be used which are based on distributing the processing of the data set across hundreds or thousands of servers. Examples of these data sets can include shopping patterns collected by customer loyalty cards or location information collected from iPhones. Big Data Analytics is the process of collecting value from that data.

Market size and growth expectations for the Big Data market
IDC estimates that the combined Big Data and Business Analytics market was a $115B market in 2013, with Big Data representing 11% of the total, while Business Analytics represented 89% of the total. As seen in Figure 10, the combined market is expected to grow at a CAGR of 13% over the next 5 years, reaching $214B by 2018. The Business Analytics market is expected to grow at a CAGR of 11% during this period to a $173B market by 2018, largely driven by growth in services and software to support Business Analytics, while the hardware to support that growth is only expected to see modest growth. 

The Big Data market is a smaller market than analytics and was a $13B market in 2013. As seen in Figure 11, the Big Data market is expected to grow at a CAGR of 26% over the next 5 years, driven largely by growth in hardware to support Big Data. Servers and storage to hold Big Data are expected to see growth of 28-29% during this period, with this growth significantly helped bycloud infrastructure which is expected to grow 41% over the next few years. Growth in Big Data is being driven by increased use of social media, the digital market place, the proliferation of mobile devices, and the growth in the Internet of Things (IoT).

 

Eoin Treacy's view -

A link to the full report is posted in the Subscriber's Area.

The technology sector is in a constant state of flux, such is the rapid pace of innovation across its various subsectors. However some clear themes are evident such as mobility, connectivity, the accelerating output of data points from every part of our lives, increasingly intelligent machines capable of self diagnostics and rapid prototyping. All of these innovations are not occurring in isolation but are collaborative, so that developments in one area are quickly co-opted to accelerate growth elsewhere. While big data uses might be most apparent in social media and advertising, its application to the industrial, energy and healthcare complexes is even more important. 

 



This section continues in the Subscriber's Area. Back to top
December 22 2014

Commentary by Eoin Treacy

Facebook Shares Rise to Record on Mobile Growth, Instagram

This article by James Callan and Kelly Gilblom for Bloomberg may be of interest to subscribers. Here is a section: 

Facebook Inc. shares rose to a record as the social network caps a year in which mobile advertising increased and marketing initiatives expanded with applications and video.

The shares advanced as much as 2.5 percent to $81.88 in New York trading, the highest price since Facebook’s initial public offering in May 2012. The stock has jumped 49 percent in 2014, a year of rally for the Standard & Poor’s 500 Index, which increased 12 percent.

This year Facebook made further headway in mobile, a business that has flourished from a minor portion of ad revenue at the time of the IPO to a majority. Facebook’s acquisition of Instagram in 2012 for $1 billion has also been paying off: A Citigroup Inc. analyst last week said the photo-sharing app is worth $35 billion.

“While the shares have likely benefited from the recent market rally, we see growing confidence in the monetization prospects of Instagram as an impetus to the recent uptick,”

James Cakmak, an analyst at Monness Crespi Hardt & Co., said in an e-mail. He recommends buying the shares.

Facebook was trading at $81.57 at 11:57 a.m., up 2.1 percent, giving the company a market value of about $228 billion. The stock has more than doubled since the IPO. 

 

Eoin Treacy's view -

Smartphones and social media represent a symbiotic relationship since the roll out of mobile phones and broadband is fuelling the evolution of social media and vice versa.

Facebook has successfully monetised its portal and remains a leader within its sector with global reach. It is open to question whether Mark Zuckerberg’s overtures to China will be successful. Personally, I doubt whether China will allow Facebook access when it has home grown products such as Wechat (Tencent Holdings) or Weibo (Sina.com) over which it has a great deal of control. 

 



This section continues in the Subscriber's Area. Back to top
November 28 2014

Commentary by Eoin Treacy

Copper Falls to 8-Month Low on Concern Oil Slump Will Cut Costs

This article by Agnieszka de Sousa for Bloomberg may be of interest to subscribers. Here is a section: 

Mining is an energy-intensive industry and lower oil costs have a deflationary impact on producers, according to Macquarie Group Ltd. Copper also declined as a strike was set to end at Peru’s Antamina mine, the world’s sixth-largest copper mine.

“Whatever positive connotations lower energy might have for global growth, the extent and pace of the decline in oil seems the more worrying factor for the moment,” RBC Capital Markets Ltd. said in a note.

 

Eoin Treacy's view -

Shale gas and oil are gamechangers for the energy sector has been a refrain here at FullerTreacyMoney since 2007. Just how much of a gamechanger is quickly coming into focus. Oil is by far the most globally significant commodity because of its utility, portability and energy intensity. Increasing global supply prompted by the high price environment represent a problem for traditional producers. Additionally, rising energy prices were a substantial component in the rising cost of producing just about all commodities. 

Falling energy prices improve the economics of mining operations, allowing greater production. However, in a falling price environment this is not a positive factor. The medium-term result of falling energy prices will be to encourage economic growth and therefore demand but prices could easily fall further before a rebalancing is achieved. 

 



This section continues in the Subscriber's Area. Back to top
November 28 2014

Commentary by Eoin Treacy

See the Drone That Is Years Ahead of Google and Facebook

This video clip from Bloomberg TV may be of interest to subscribers. Here is the link

Eoin Treacy's view -

The evolution of drones have been picking up pace as the size and weight of motors, batteries and cameras decreases. Bestbuy is now selling a variety of camera enabled drones which further exemplifies how ubiquitous the technology is becoming. 

This interview with the CEO of China’s DJI Technology by the Wall Street Journal highlights how quickly the sector is evolving and how quickly the availability of technology is driving further innovation. The FAA’s report this week on the misbehaviour of some drone pilots brings into the focus the need for some form of regulation of the sector.  



This section continues in the Subscriber's Area. Back to top
November 21 2014

Commentary by Eoin Treacy

Email of the day on the outlook for 2015

Hi David & Eoin, I wanted to get FTM thoughts and opinion on where the best investment returns could be had over the next 12 months and what would be the key things to watch for? Thanks for an excellent service 

Eoin Treacy's view -

Thank you for your kind words and your question. This is a topic we cover almost daily in the written commentary and the audio but it is a good time to summarise our views. 

Let’s ruminate for a moment though on the timing of your question. Generally speaking, the last six weeks of the year is given over to thinking about the possibility of a Santa Claus rally and people don’t generally look at the outlook for the next year until the last week of December or the first week of January. It made headlines during the week that Goldman Sachs had released its prognostication for the coming year, which may have prompted your email. However I believe it is worth considering that the stock market is a discounting mechanism and as a bull market progresses we tend to want to discount cash-flows from increasingly further into the future. It is a measure of how strong the market has been over the last month that investors are already planning for next year. Five consecutive weeks to the upside suggest some consolidation is increasingly likely.

 



This section continues in the Subscriber's Area. Back to top
November 21 2014

Commentary by Eoin Treacy

Email of the day on US listed robotics companies

Any U.S. traded ways to invest in these service robotic application companies? Which industries are the ripest insofar as labor displacement? The national call for a minimum wage seems an added tailwind.

Eoin Treacy's view -

Thank you for these questions which may be of interest to other subscribers. The disruptive power of technological innovation is hard to predict but we can be assured that there will be some major winners and losers.

If you look at the teamsters website, the self-professed strongest union in America, it is not difficult to see how they will oppose any threat to their working conditions and what an incentive this creates for companies to completely displace them. To this end Amazon has already introduced a robotic retrieval system in its warehouses and we can anticipate this will be ubiquitous before long. 



This section continues in the Subscriber's Area. Back to top
November 20 2014

Commentary by Eoin Treacy

Shaken, Not Stirred

This article gained some attention in the last week as cruise lines experiment with replacing bartenders with robots. Here is a section:

Once the guests enter the bar, they virtually create their drink via a smartphone or tablet app. The sky is the limit as far as drink orders go. The robots can execute options ranging from alcoholic to non-alcoholic beverages as well as a full range of combinations.

As soon as the guest’s order has been sent, the KR 5 arc robots get to work. They grip the cocktail mixer, fill it with the desired ingredients, shake it and pour the finished cocktail into the glass. The robot only requires one minute to make two drinks. Their compact design makes the six-axis robots ideal for the bar environment. Thanks to the longest reach in their class as well as their low weight, the robots are practically predestined for use on a cruise ship.

“Makr Shakr is an excellent example of how robot-based automation can change the interaction between humans and products – a topic that we have researched substantially”, says Carlo Ratti, professor at the Massachusetts Institute of Technology and co-founder of Makr Shakr.

Eoin Treacy's view -

The evolution of robotics, optics and power consumption has revolutionised the utility of these machines and their cost continues to trend lower. Some will obviously worry at the loss of employment opportunities for lower skilled work this entails. On the other hand, for a cruise ship minimising the berths taken up by crew means more space can be allocated to fare paying passengers. These types of economic considerations are driving demand for machines. 



This section continues in the Subscriber's Area. Back to top
November 10 2014

Commentary by Eoin Treacy

Ma Says Alibaba Shareholders Should Feel Love After Coming Third

This article by William Mellor, Lulu Yilun Chen and Zijing Wu for Bloomberg may be of interest to subscribers. Here is a section: 

And Alibaba is making money: Net profit tripled to $3.7 billion in the year ended on March 31. While net income fell 39 percent in the three months ended Sept. 30, in part as a result of the cost of integrating new businesses, revenue jumped 54 percent during the quarter -- beating analysts’ estimates.
     
“The growth potential of Internet companies in China is many multiples greater than in the U.S.,” says Shane Oliver, who helps manage $131 billion at AMP Capital Investors in Sydney. “Businesses which can take advantage of that, such as Alibaba, seem incredibly attractive.” In line with AMP policy, Oliver declined to say whether his firm bought the stock.
    
Ma isn’t the only billionaire tapping China’s Web-savvy consumers. Robin Li, 45, was China’s second-richest man as of Nov. 9, with a fortune of $17.2 billion, after founding search engine Baidu Inc. Ma Huateng, 43, who was worth $15.6 billion on that date, has expanded Tencent Holdings Ltd. into China’s top instant-messaging service.

 

Eoin Treacy's view -

The opening up of the Shanghai – Hong Kong Exchange link is a major event. It is tempting to think of it from the perspective of a Westerner gaining access to a new market but it is even more important for mainland Chinese who will for the first time have access to Hong Kong listed securities and by extension the wider global market. 



This section continues in the Subscriber's Area. Back to top
November 04 2014

Commentary by Eoin Treacy

Xiaomi Said to Seek Funding at About $50 Billion Valuation

This article by Bloomberg News may be of interest to subscribers. Here is a section:

DST, an existing investor, is among the potential participants in the funding round, said one of the people.

Xiaomi’s valuation would also exceed recent funding rounds that pegged U.S. startups Uber Technologies Inc. at $17 billion and Snapchat Inc. at $10 billion. Forbes reported on Oct. 31 that Xiaomi was seeking a valuation of more than $40 billion. A representative for DST, run by Russian investor Yuri Milner, couldn’t be reached for comment.

In an interview in September 2013, CEO Lei said Xiaomi wouldn’t sell shares to the public in the next five years.

Xiaomi more than tripled global smartphone shipments to 17.3 million units in the third quarter from 5.6 million a year earlier, IDC reported Oct. 29. Its market share more than doubled to 5.3 percent from 2.1 percent, the researcher said.

That lifted Xiaomi into the world’s top three vendors for the first time, trailing only Suwon, South Korea-based Samsung Electronics Co. and Apple Inc. in Cupertino, California, IDC reported. Cross-town competitor Lenovo subsequently completed its purchase of Motorola in a combination that would have made it the third-largest vendor, according to IDC.

 

Eoin Treacy's view -

As Chinese and other Asian fabless manufacturers move up the value chain in terms of expertise and build quality, it is inevitable that they will become even more potent competitors. While potential rewards can be outstanding, the risk of failure is also nontrivial as witnessed by Nokia, Research in Motion and HTC. 



This section continues in the Subscriber's Area. Back to top
November 03 2014

Commentary by Eoin Treacy

Email of the day on lithium

LITHIUM SUPPLY/DEMAND PROJECTIONS 2015 & Beyond. Please advise whether You or the Collective have some figures/feedback on the above subject? Thanks, and regards

Eoin Treacy's view -

Thank you for this question which the Collective may have some additional input on. What is clear from a brief perusal of the shares in the lithium miners section of the Chart Library is that there are some clear winners and losers. This suggests that the more efficient producers are prospering and those with a longer lead time to production are struggling. We might also conclude that supply is ample at this stage.



This section continues in the Subscriber's Area. Back to top
October 31 2014

Commentary by Eoin Treacy

Insights in 140 Words October 31st 2014

Thanks to a subscriber for this edition of Deutsche Bank’s weekly missive. Here is a section on Facebook:

Facebook - Leave aside Mark Zuckerberg's dystopian goal of "connecting the whole world". Before then investors must think about the eight per cent drop in Facebook's share price since Wednesday. To understand why jitters surround a company that is growing sales and earnings 60 and 90 per cent respectively, look through a DuPont analysis lens. Multiply the current ebit margin of about 40 per cent by an asset-turn of 0.6 times and a leverage ratio of 1.2. That spits out a return on equity of 17 per cent, adjusted for tax. Given that asset-turn and leverage are unlikely to change much, shareholder returns become a margin game. Hence the reaction when Facebook said spending would increase 50 to 70 per cent in 2015. The rise equates to almost half of current ebit or the entire projected increase in gross profits next year.

Eoin Treacy's view -

The full note is posted in the Subscriber's Area.

Facebook will reinvest next year’s expected profits in expanding its business which for a company with a lower P/E would be welcomed by investors. However with the leverage Facebook has in its business, reinvesting everything means it has no choice but to meet or exceed sales targets if investors are to be placated. 

 



This section continues in the Subscriber's Area. Back to top
October 29 2014

Commentary by Eoin Treacy

The Link You Just Clicked May Not Be Genuine

This article by Leonid Bershidsky for Bloomberg may be of interest to subscribers. Here is a section: 

Thanks to a new report from cybersecurity firm FireEye, we now know exactly how hackers sponsored by the Russian government have gotten access to sensitive information on computer networks owned by NATO, its member countries and former Soviet nations such as Georgia. The methods are sophisticated but, with just a little vigilance, easily fended off.

The report stands out for its insight into how hackers operate. Some security-company reports on alleged Russian hacking have provided valid technical insights; others have been ominous but weak on detail. Together, they have provided a pretty good idea of what malware hackers have used. And they've reported that the various hacker groups used phishing to gain that access: Someone in the target organization had to open an email attachment or click on a link to allow the malware in.

But until now it hasn't been clear what bait hackers have used to induce those fatal clicks. It's easy to say that anyone who clicks on links or opens attachments in unsolicited emails is a fool, but it would be wrong to assume that there are many fools in bureaucracies such as NATO's. People there, and at major companies, get cybersecurity training. So why are the hackers so often able to trick them?

FireEye, based in Milpitas, California, is a major player in the computer security industry. Research by Mandiant, a company it acquired this year for $1 billion, was behind the U.S. indictment of Chinese military hackers last May. FireEye has the resources and the attention to detail required to study hacker attacks from initial penetration through to data theft. So to anyone sitting on sensitive information that could be of interest to government-sponsored hacker groups -- be they Russian, Chinese or American -- FireEye's report on what it calls Advanced Persistent Threat 28 is required reading.  

 

Eoin Treacy's view -

We are accustomed to seeing the major powers perform war games on a relatively regular basis but more recently these operations have been conducted in an unconventional manner where manipulation of the media, cyber warfare and other non-kinetic strategies are being explored. If one military complex is practising these techniques it is reasonable to assume they and others are also actively pursuing such strategies in the background. Offensive cyber strategies remain the preserve of governments, but the corresponding requirement for defensive strategies represents a growth trajectory. 



This section continues in the Subscriber's Area. Back to top
October 28 2014

Commentary by Eoin Treacy

Ackman $5.3 Billion Allergan Bet Examined Before Ouster Vote

This article by Edvard Pettersson for Bloomberg may be of interest to subscribers. Here is a section:

Bill Ackman’s accumulation of $5.3 billion in Allergan Inc. stock will be scrutinized by a judge who will decide whether the hedge fund manager can vote his 10 percent stake to help seal a hostile takeover bid by Valeant Pharmaceuticals International Inc.

Allergan, the maker of the anti-wrinkle treatment botox, seeks a court order barring Ackman from voting the shares held by his PS Fund 1 at a Dec. 18 meeting, where shareholders will be asked to remove six directors who oppose Valeant’s $54 billion unsolicited bid.

Ackman calls Allergan’s request “drastic and unprecedented,” while the company alleges the activist investor acquired his shares through insider trading. The decision by U.S. District Judge David Carter, who will hear arguments today in Santa Ana, California, may determine the outcome of the vote.

“An injunction would substantially tilt the playing field because a majority of outstanding, as opposed to voting, shares must vote in favor of removing directors for this proposal to pass,” Ackman said in a court filing. “If PS Fund 1 cannot vote its shares, they will effectively become ‘no’ votes.”

Valeant, based in Laval, Quebec, wants to buy Allergan to expand its portfolio and become one of the world’s largest drugmakers. Allergan Chief Executive Officer David Pyott has fought to keep the company independent, announcing a restructuring that includes cutting 1,500 jobs.

Eoin Treacy's view -

Whenever I think of Botox I think of my grandmother’s response to a childhood question “did you have a midlife crisis?” She said she would have loved to but couldn’t afford one. I included Allergan in the original list of Autonomies because its product line epitomises the narcissism so often associated with the middle classes. Valeant and Bill Ackman obviously agree and their efforts to acquire the company represent a media spectacle which has boosted the price of both securities.


The biotechnology sector accelerated to a medium-term peak in the first quarter and most constituents pulled back sharply to close overextensions relative to the 200-day MA. The majority of large caps stabilised and the sector has been an absolute and relative outperformer over the last month despite heightened volatility for the wider market. 



This section continues in the Subscriber's Area. Back to top
October 24 2014

Commentary by Eoin Treacy

Large 3D nanostructures built from Lego-like DNA bricks

This article by Richard Moss for GizMag may be of interest to subscribers. Here is a section: 

By combining the bricks in different patterns, they could form large numbers of distinct crystals across these categories, with simple modular design on the computer followed by self-assembly on the part of the DNA strands allowing both great precision and near infinite potential at scales up to 80 nanometers (and perhaps more in the future).

What's more, the technique could enable scalable production of new and emerging technologies, such as quantum computers. The team demonstrated that self-assembled DNA crystals made from these bricks could house gold nanoparticles inserted into slots less than two nanometers apart from each other along the crystal structure – a feat that's important for strong plasmonic coupling, which would make the technique useful in photovoltaic devices like solar cells.

The researchers expect DNA crystals to also prove useful in developing more versatile inorganic circuits and other nanoscale technologies. The technique could also aid in protein crystallography, which studies protein structures at atomic resolutions for applications in biotechnology, pharmaceuticals, and the academic field of structural biology.

 

Eoin Treacy's view -

At a basic level all digital data is made up of 1s and 0s. DNA pairs of As with Ts and Cs with Gs represent a logical avenue for additional work in creating novel new programing languages with a biotechnology objective. It is only a matter of time before this sector develops to the extent that novel solutions can be printed using additive manufacturing. This innovation can be seen as one more incremental step towards full customisable medicine. 



This section continues in the Subscriber's Area. Back to top
October 23 2014

Commentary by Eoin Treacy

From mobility to connectivity

Thanks to a subscriber for this interesting report from Deutsche Bank focusing on the Internet of Everything theme which is likely to continue to gain attention over the coming decade. Here is a section: 

IoT-driven demand for servers to all benefit the Asian technology supply chain in 2015-20. In this report we focus on devices which have yet to become connected and will be new growth drivers in 2015-20. We expect the upstream semiconductor sector to see incremental sales contribution from IoT and wearable ICs in 2015-20. We anticipate server demand to benefit the downstream hardware sector more than the upstream semiconductor sector.

Internet of Things – the connectivity theme After the mobility theme drove the proliferation of smartphones and tablet PCs since 2005, we expect the connectivity theme to trigger IoT demand in 2015-20. We expect 1) low-power application processors and microcontrollers with connectivity and embedded memory, and 2) MEMS (micro-electro-mechanical systems) sensors to be the major growth drivers for the upstream semiconductor sector. The key IoT applications for the downstream hardware sector include smart cities, home automation, eHealth, retail, smart cars, logistics, industrial control, smart metering, and smart agriculture and farming. In our view, IoT will provide benefits such as life quality improvement, productivity improvement, energy saving, and security enhancement.

Wearable devices to be key products in an IoT world
Wearable devices can be connected to mobile devices and belong to the concept of IoT. Major applications for wearable devices will be entertainment, healthcare monitoring, mobile communication (connection with mobile devices), and mobile payment, in our view. We expect wearable device units to grow at a 25% CAGR in 2015-20.

IoT infrastructure should drive continuous server demand growth
We believe IoT infrastructure will be based on the current cloud architecture. Once IoT connects more objects, machines, and networks for global cloudbased services, data will be routed through servers for applications and data analysis. The uptake of IoT should therefore result in growing demand for data analysis and storage in servers and continue to drive demand for servers in 2014-18 with 4.3% unit CAGR 

 

Eoin Treacy's view -

A link to the full report is posted in the Subsriber's Area.

Connectivity is an increasingly utility-like commodity which is essential to modern living. As 4G networks continue to evolve and speed up, the practicality of having access to the internet wherever you go, at an acceptable cost and for an increasingly wide array of uses is swiftly becoming a reality. Set aside for one moment the angst of what we are to do to ensure full employment and think of the productivity that can be gained from supplying an educated, astute worker with tools that make their jobs easier. The roll out of technology to the global workforce and the development of entirely new industries that benefit from big data, tech distribution and connectivity represents the type of development on which secular bull markets are based. 



This section continues in the Subscriber's Area. Back to top
October 15 2014

Commentary by Eoin Treacy

Lockheed Martin Pursuing Compact Nuclear Fusion Reactor Concept

This press release from Lockheed Martin is important. Here is a section:

“Our compact fusion concept combines several alternative magnetic confinement approaches, taking the best parts of each, and offers a 90 percent size reduction over previous concepts,” said Tom McGuire, compact fusion lead for the Skunk Works’ Revolutionary Technology Programs. “The smaller size will allow us to design, build and test the CFR in less than a year.”

After completing several of these design-build-test cycles, the team anticipates being able to produce a prototype in five years. As they gain confidence and progress technically with each experiment, they will also be searching for partners to help further the technology.

Eoin Treacy's view -

Expectations of when we might have the first viable fusion reactor have been in the range of 25 years away for the last 60 years. What is interesting now is the volume of literature and development in the subject is increasing exponentially and expectations of when we might have the first active reactor are shortening to the medium term. Lockheed Martin is not a pop science organisation so when they say they can do it I’m inclined to take them at their word. On a day when the market is weak, a press release such as this is likely to be ignored by the mainstream media but it is important. http://www.lockheedmartin.com/us/products/compact-fusion.html In the event that fusion is achieved it would change the global economy beyond recognition over the next 30 years. 



This section continues in the Subscriber's Area. Back to top
October 14 2014

Commentary by Eoin Treacy

Giant Battery Unit Aims at Wind Storage Holy Grail

This article by Whitney McFerron for Bloomberg may be of interest to subscribers. Here is a section: 

Electric-car battery prices already have fallen by 50 percent since 2010 to about $500 per kilowatt hour, and “by drawing on auto-battery technology, battery makers may also be able to supply storage batteries at a lower price,” Citigroup said in a Sept. 25 report. Tesla Chairman Elon Musk said in July that battery packs for electric cars will drop to $100 in the next 10 years. The Tehachapi batteries are supplied by LG Chem Ltd. and are the same type used in General Motors’ Volt.

The Southern California Edison project is part of a push for more wind and solar power in the state, among the sunniest in the U.S. A third of California’s electricity must come from renewable sources by 2020, and mandates also require that the three biggest investor-owned utilities store 1,325 megawatts by 2024. California already has more than 12,000 wind turbines, the most of any state, according to the American Wind Energy Association.

Eoin Treacy's view -

Many of the efficiencies claimed by battery manufacturers have been achieved via scale in manufacturing rather than technological leaps. Tesla’s gigafactory takes this process further by introducing additional economies of scale to further reduce the price of lithium batteries. So far ground breaking innovation has been more difficult to achieve than previously envisaged by companies but one benefit of building utility sized batteries is that power to weight ratios which are so important for car batteries are no longer a consideration.  

 



This section continues in the Subscriber's Area. Back to top
September 25 2014

Commentary by Eoin Treacy

Bitcoin Economy Widens as Parents Pay Digital Allowance

This article by Olga Kharif for Bloomberg may be of interest to subscribers. Here is a section: 

“Bitcoin makes a lot more sense in emerging economies like Brazil and Argentina and Russia,” said Nicolas Cary, CEO of Blockchain.info, a payment service. “The number of new sign-ups we see in Latin America is increasing. You are moving beyond the people  placing bets to people seeing value.”

The pace of global adoption will depend on regulation, bitcoin’s price moves and addressing security concerns. Price volatility is a major worry because the price can be influenced by a relative small group of owners. While programmers build services such as insurance into the system, bitcoin may be less secure than more established forms of payment. Once a bitcoin changes hands, there are few means to get it back.

Meanwhile, hackers are on the prowl. Earlier this year, Japanese bitcoin exchange Mt. Gox lost 650,000 bitcoins to cyber criminals. This summer, a hacker stole 1,270 bitcoins from Androklis Polymenis, a software developer in Greece. Polymenis posted a 500-bitcoin bounty to track down the perpetrator and says the hacker returned 462 bitcoins in exchange for having the bounty lifted.

“The problem with bitcoin is security and user friendliness,” said Polymenis. “How can you expect mass adoption when I get hacked so easy?”

That’s not deterring Greg Abbott, 35, who sells fried pies from a food truck in Portland. Sure, only four or five customers a month use bitcoin. That’s not the point, he says.
     
“The disruptive nature is what I like so much about it,” Abbott said. “This is a real opportunity to look at how money systems are formed. It’s a real-world experiment of how these things work in the beginning of currencies.”

Eoin Treacy's view -

Bitcoin represents an innovation in transferring funds more than any other single factor. Its value has stabilised near $400 since the abrupt drop from its accelerated advance late last year, This stability may be lending some confidence to people seeking to use it but some considerable hurdles need to be addressed before it can be more widely adopted, not least security.



This section continues in the Subscriber's Area. Back to top
September 22 2014

Commentary by Eoin Treacy

China Clamps Down on Web, Pinching Companies Like Google

This article by Keith Bradsher and Paul Mozur for the New York Times may be of interest to subscribers. Here is a section: 

Frustrated users have often resorted to “virtual private network,” or V.P.N., services to evade China’s Internet filters. But those services, too, have come under concerted attack from the authorities, who have interrupted service to them with increasing frequency. Many ordinary citizens cannot afford or obtain access to V.P.N.s to begin with.

In the meantime, Google’s business continues to erode. Its share of the Chinese search engine market fell to 10.9 percent in the second quarter of this year, as the stepped-up blocking began to take effect — compared with one-third in 2009, when it still had servers there.

Google’s problems extend far beyond search. Its application store, called Google Play, is only partly accessible in China.

That has led to the rise of a number of locally run application stores, which analysts say will sometimes market pirated copies of software or charge extra to promote a new application. Companies are often forced to create versions of their apps for China that are slightly different from the versions distributed to the rest of the world on Google’s app store.

“Because Google Play has low market share” in the Chinese market, “app publishers who have applications worldwide on Google Play don’t receive the proportionate share of users in China without publishing to local Android stores, even if they have localized Chinese versions,” said Bertrand Schmitt, chief executive of App Annie, a company that tracks global app distribution.

Google also hosts publicly available libraries of coding scripts and fonts on its servers, but China now blocks these libraries. The chief technology officer at the start-up said his company had resorted to creating its own libraries and hosting them on its own servers, wasting costly computing power and space.

Eoin Treacy's view -

Western companies invested heavily in Chinese expansion and accepted knowledge sharing joint ventures for the promise of access to China’s burgeoning consumer sector. The reality of profitability in China has been more disappointing than originally envisaged and companies are understandably chastened at the reception they have received. For a company such as Google with a global franchise that relies on users accessing its search and mobile apps in order to facilitate advertising, the loss of China as a potential market was priced in shortly after its withdrawal from the country. 



This section continues in the Subscriber's Area. Back to top
September 19 2014

Commentary by Eoin Treacy

Despite the Excitement, There is Reason to Think Twice on Alibaba

This article from the New York Times may be of interest to subscribers. Here is a section: 

At $68 a share, Alibaba’s market capitalization is about $168 billion. It’s hard to find a United States company that’s directly comparable, but Professor Greenwald said eBay comes the closest. Like Alibaba, it has an auction site that benefits from a powerful network effect, it offers a vast e-commerce site and it has a pay system, PayPal. (While Alibaba spun off its payment system, Alipay, Alibaba will get a share of the proceeds from any sale or public offering of Alipay.) EBay’s market capitalization is about $65 billion.

Of course, eBay doesn’t dominate e-commerce in the United States to the degree that Alibaba does in China. But is it reasonable to assume such dominance will persist as the Chinese market matures? No one company dominates e-commerce in the United States or in Europe, and none are as large as old-economy Walmart. China may now be underserved by national brick-and-mortar chains, but that could change. Professor Greenwald said he believed that Alibaba deserved a premium to eBay — perhaps twice eBay’s market capitalization. “But three times? That’s really pushing it,” he said.

Eoin Treacy's view -

The ticker symbol, BABA, means father in Mandarin and this was certainly the mother and father of all IPOs. The share price briefly testing the $100 area today, up from the $68 agreed at the close of the offer stage. Some of the early investors in the company were able to liquidate positions early and others will have had an opportunity to sell today so it is questionable where the additional demand will come from to push prices much above today’s high in the short term.

Meanwhile this additional article from the New York Times highlights the entrepreneurial ecosystem developing in picturesque Hangzhou. The start-ups spawned by former Alibaba employees suggests the number of companies that will be seeking to IPO is likely to increase in the coming years. It remains to be seen if Alibaba’s former employees will have the same effect on Hangzhou as HP’s had on Silicon Valley. 



This section continues in the Subscriber's Area. Back to top
September 19 2014

Commentary by Eoin Treacy

Robust demand and disciplined supply for metal casings

Thanks to a subscriber for this report from Deutsche Bank focusing on the metal casings sector for hand held devices. Here is a section:  

We hold an optimistic view on the metal casings industry. On the demand side, we are confident about its robust shipment momentum within the next three years due to (a) the design trend toward ultra-slim and lighter form-factor, and larger panel-screens on mobile devices (NBs, smartphones and tablets), (b) Apple’s preference for using metal casings (its adoption rate at 86%, Figure 19) for iPhone, iPad and Macbook products, and (c) the increasing adoption rate from other smartphone and tablet brand vendors. On the supply side, the disciplined procurement of CNC (Computer Numerical Control) machines by major casing suppliers in Asia (hence controlled supply increase) and the higher entry barriers in metal casings manufacturing and surface treatment solution can help ease the Street’s concerns about the industry’s oversupply risks.

Eoin Treacy's view -

A link to the full report is posted in the Subscriber's Area.

It is easy to become desensitised to photos of long lines of people sleeping outside Apple stores in order to be among the first to own the next new product. However these people represent the loyal customer base that is the envy of every other consumer electronics company. News last week that privately held, discount smart phone manufacturer Xiaomi would be moving to metal cases exemplifies the trend of Apple imitators, not least in the build quality end users have come to expect.



This section continues in the Subscriber's Area. Back to top
September 09 2014

Commentary by Eoin Treacy

Apple Unveils Watch, Bigger-Screen IPhones in Product Blitz

This article by Adam Satariano and Tim Higgins for Bloomberg may be of interest to subscribers. Here is a section: 

“Apple Watch is the most personal device we have ever created,” Cook said at the event. “We set out to create the best watch in the world.”

Cook unveiled the watch after earlier introducing Apple Pay, the mobile payments system. Apple is partnering with credit-card companies including American Express Co., MasterCard Inc. and Visa Inc. for the service, which will be offered in the U.S. starting next month.

In introducing a mobile-payments service, Apple squarely took aim at existing payments services. “Our vision is to replace this and we’re going to start by focusing on payments,” Cook said as a picture of an old wallet was flashed on screen.

The company also posted an image of a leather billfold on its website with a message saying, “Wallet, your days are numbered.”

Apple Pay will work with services including mobile car- booking application Uber Technologies Inc., restaurant reservation system OpenTable and daily deals company Groupon Inc., the company said.

 

Eoin Treacy's view -

I watched the Apple presentation this morning and I want an Apple Watch for the fitness tracking apps but I’m not sure I need one when I already have a FitBit Flex and an iPhone. The share had rallied to a new high over the last month on expectations of big news in the product line up. The watch is a new product but it is open to question whether it is meaningfully better than the Samsung products already in the market. That would suggest that it will be up to Apple to demonstrate that the apps are better and the ecosystem more attractive than other product stables. 



This section continues in the Subscriber's Area. Back to top
August 20 2014

Commentary by Eoin Treacy

Apple Rises to Record on Optimism Over New Batch of Products

This article by Adam Satariano for Bloomberg may be of interest to subscribers. Here is a section: 

The stock’s rise shows investors are buying into the strategy outlined by Chief Executive Officer Tim Cook, who has been prodded to introduce bigger iPhones, give more money back to stockholders and introduce new devices.

Those shareholders are now getting what they want. In addition to the larger iPhones, Cook has vowed that Apple will enter a new product category this year. The company is said to be developing a smartwatch, and Morgan Stanley’s Katy Huberty has said Apple may sell as many as 60 million of the new wearable device in its first year on the market, adding up to $9 billion in revenue for fiscal 2015. Apple hasn’t commented on the prospect of larger iPhones or a possible smartwatch.

Cook also has been more open than Jobs was to using the company’s cash hoard to return money to shareholders. Apple is in the midst of a program to give back $130 billion through buybacks and dividends. He’s also been more active in acquisitions, including spending $3 billion to buy Beats Electronics LLC, the company’s biggest-ever purchase.

Eoin Treacy's view -

Is Apple hitting a new all-time high because investors are enthused about a beefed up product line or because they wish to benefit from the $130 billion in buybacks and dividend increases promised by the company? The first is rather ephemeral until the products are in fact launched but share buybacks are very real.



This section continues in the Subscriber's Area. Back to top
August 04 2014

Commentary by Eoin Treacy

Tesla and Panasonic sign agreement on battery-making Gigafactory

This article by Ben Coxworth for Gizmag may be of interest to subscribers. Here is a section:

As mentioned in our previous article, Tesla plans for the Gigafactory to produce 500,000 batteries per year by 2020, with expected battery cell output of 35 GWh/yr and battery pack output of 50 GWh/yr. Current global battery output, from a variety of manufacturers, sits at just under 35 GWh/yr.

According to yesterday's announcement, "Tesla will prepare, provide and manage the land, buildings and utilities [while] Panasonic will manufacture and supply cylindrical lithium-ion cells and invest in the associated equipment, machinery, and other manufacturing tools based on their mutual approval."

The factory will be located somewhere in the US and managed by Tesla, with Panasonic occupying about half of the manufacturing space and taking the role of principal partner. Although the cells will be made by Panasonic, Tesla will be incorporating them into battery modules and packs that it will be assembling.

Along with lowering the price of batteries by making them in large numbers, Tesla and Panasonic also plan on reducing costs by manufacturing cells tailored specifically to EVs, locating materials suppliers on-site, and implementing measures to lower the utility and operating expenses of the factory.

Eoin Treacy's view -

Developing batteries that are both highly efficient and cheap, has proven to be a much more difficult challenge than people initially expected five years ago. Lithium, despite its propensity to self-combust, remains the standard technology for batteries for everything from mobile phones to electric cars. The anticipated gigafactory aims to produce batteries that are marginally more efficient but considerably cheaper in the assumption that this lower cost will help fuel demand. They might be right. 



This section continues in the Subscriber's Area. Back to top
July 24 2014

Commentary by Eoin Treacy

Facebook Shares Surge to Record as Mobile Ads Fuel Gains

This article by Sarah Frier for Bloomberg may be of interest to subscribers. Here is a section: 

Facebook’s revenue gain follows Google Inc.’s results last week, when the Web-search company posted sales that exceeded analysts’ estimates, largely based on the strength of online ads. Yet while Google reported a 6 percent decline in the average price of its ads, which was offset by a higher volume of promotions, Facebook has been able to charge more for fewer ads.

Facebook and Google are taking share from other Internet companies such as Yahoo! Inc., which last week reported a decline in quarterly sales and missed analysts’ projections.

In total, Facebook accounted for 5.8 percent of worldwide digital ad revenue in 2013, up from 4.1 percent in 2012, according to EMarketer Inc. Digital ad spending worldwide rose 14.8 percent to $120 billion last year and is projected to reach $140 billion this year.

 

Eoin Treacy's view -

Earnings really do matter which helps to explain Facebook’s outperformance relative to most of the other social media companies. The social media sector is highly varied both in terms of the products offered and the revenue generation models employed. 



This section continues in the Subscriber's Area. Back to top
July 22 2014

Commentary by Eoin Treacy

Hasbro saddles up 3D-printed My Little Pony figurines designed by fans

This article by Nick Lavers for GizMag may be of interest to subscribers. Here is a section: 

While fan-created My Little Ponies may be something of a niche, such forward-thinking ventures highlight the potential of 3D printing. The technology has opened up all kinds of possibilities, but one very real implication is the issue of intellectual property theft. So much so, research firm Gartner predicts that by 2018, 3D printing will result in the loss of more than US$100 billion in intellectual property each year.

Collaborative efforts like SuperFanArt, where consumers are empowered and enticed by an element of authenticity, rather than the convenience of reproducing their own knock-offs, could see established brands such as Hasbro get the jump on the Pirate Bays of tomorrow.

The first line of My Little Ponies designs will be on show at Comic-Con San Diego from July 24 to 27. You can check out the designs in the gallery and find out more about becoming a SuperFanArt featured artist via the source link below.

Half of Europe’s Jobs Threatened by Machines in U.S. Risk Echo – This article by Simon Kennedy for Bloomberg may be of interest to subscribers. Here is a section: 

Eoin Treacy's view -

In much the same way that intellectual property is threatened by the ability of people to download music, videos and books from the internet, the evolution of 3-D printing represents a similar threat to product designers and products. Music companies and publishers have changed their business models to permit downloads and adjusted their pricing to lower the barrier to entry. It is conceivable that 3-D products will go the same way. 



This section continues in the Subscriber's Area. Back to top
July 18 2014

Commentary by Eoin Treacy

The next industrial revolution: Moving from B-R-I-C-K-S to B-I-T-S

Thanks to a subscriber for this report from Goldman Sachs exploring the industrial applications of the Internet of Things (IoT). Here is a section: 

While IoT spans a variety of industrial sectors, the focus of this report is on Home Automation. Previous reports in this series addressed the applications of IoT to CommTech, Semiconductors and Software. In this report, we address the impact of the IoT on the industrials space, with a deeper dive into Home Automation within the Building Automation opportunity below. We expect a series of follow-up reports touching the following topics.

Building Automation focuses on improving energy efficiency and occupant comfort/utility within the home or commercial building. Key advantages include improved security, remote monitoring of devices, and energy management.

Manufacturing applications of IoT could help facilities to reduce downtime through predictive maintenance, have better visibility into inventory and energy management, and improve operational efficiencies overall.

Resources could benefit from real-time equipment monitoring, energy efficiency (smart meters), and fuel reduction (O&G).

 

Eoin Treacy's view -

A link to the full report is posted in the Subscriber's Area.

The frivolity of much of the social media space has led some to believe that future productivity gains will be limited. However, the increasing application of new technologies to the industrial sector almost certainly insures that this assumption will prove false. Rapid prototyping, embedded sensors, processors and transmitters are driving efficiencies that are transforming the industrial sector. This is important because productivity growth is a necessary component in the evolution of a secular bull market. It is for this reason that veteran subscribers will be familiar with our continued emphasis, particularly in the Friday audio, that we are in a technological golden age more commonly referred to as the Third Industrial Revolution. 



This section continues in the Subscriber's Area. Back to top
July 17 2014

Commentary by Eoin Treacy

US Dividend Contenders

Eoin Treacy's view -

Following on from yesterday’s addition of a section for the US Dividend Champions to the Chart Library, I created a section for the US Dividend Contenders today. Unlike the Dividend Aristocrats which demand 25 years of consecutive increases as well as a market cap and liquidity provision, the Champions and Contenders only look at records of increasing dividends. In the case of the Champions this is at least 25 consecutive years and between 7 and 24 years for the Contenders. 

The US Dividend Contenders represent an interesting universe of companies where banks, utilities, insurance, MLPs and REITS dominate. This list also highlights the increasingly large number of technology companies that have maintained solid records of dividend increases over the last decade. 

 



This section continues in the Subscriber's Area. Back to top
July 15 2014

Commentary by Eoin Treacy

Big Plan by Google to Race Amazon to Your Door

This is an informative article by Jason Del Rey for Recode.net and may be of interest to subscribers. Here is a section: 

Big retailers, however, are clearly taking these partnerships seriously. Instead of sending mid-level business development executives to strike deals with Google, some are negotiating at the top. Costco’s CEO, for instance, flew out to Google’s Mountain View, Calif., campus to meet with Google CEO Larry Page before agreeing to participate in the Google Shopping Express program. Costco CFO Richard Galanti also met with execs at Google on a separate trip. Galanti said it’s important for Costco to consider new sales channels as more shoppers make purchases online.

“Why wouldn’t Google just eliminate the merchant from the middle?” Faisal Masud, e-commerce chief at Staples

“We’re pretty good at knowing what we know how to do and what we don’t,” Galanti said.

“We’re not arrogant about it.”

What’s keeping some retail bosses awake at night, however, is the ongoing suspicion that Google could eventually build an Amazon-like marketplace in which the search giant sells products directly to shoppers and cuts out brick-and-mortar retailers altogether. Even some current Google Shopping Express partners see the potential for such an approach.

Fallows, for his part, was adamant that Google will not pursue this strategy.

“Very firmly no,” he said. “Google is a platform and partnership business. We can’t say that strongly enough.”

Another fear among some retailers, according to RetailNet Group’s Anderson, is that as long as the purchases keep running through Google instead of the retailer’s site, Google will start to collect more and more valuable information on who buys what. Google could then use that data to attract more money from brands looking to promote their own product through Shopping Express no matter which retail store it comes from. Some of that marketing money, Anderson believes, could in turn be shifted away from funds these brands typically allocate to retail stores to promote individual products.

“Google may be in a position to go to Procter & Gamble and say, ‘Why would you give [marketing] dollars to Target when you can just give them to us and we’ll promote the brand whether the shopper decided to buy from Target or another retailer?’” Anderson said.

Despite these concerns, Google has assembled a respectable group of partners to the program. Several of them say participating in the Google Shopping Express program gives them a way to evaluate whether it’s more cost effective to offer same-day and next-day delivery themselves, through a partner or whether they should at all.

 

Eoin Treacy's view -

The retail sector is in a constant state of transformative development. This is particularly true in the USA where penetration of online shopping is higher than elsewhere. Since moving to Los Angeles, it is apparent that there is no shortage of retail space in West LA. Whether this is as a result of online eating into high street market share, the slow recovery of consumer appetites, high rents or the dominance of big box stores and malls is debatable. What seems clear is that the survivors on the high street are service oriented or tailor to a very specific niche. 

The entry of Amazon and Google into the grocery market is a fresh interesting development. Since realising that we could do our Costco shopping online so that we could outsource the porting of heavy bulk items such as gallons of washing detergent etc. to someone else we’ve concentrated on pleasure shopping for fruit, veg and meat at Bristol Farms and Whole Foods. Both Amazon and Google’s delivery trucks are regular sights around our neighbourhood. 

 



This section continues in the Subscriber's Area. Back to top
July 07 2014

Commentary by Eoin Treacy

Foxconn recruitment spree shows automation plan setback

This article for Want China Times may be of interest to subscribers. Here is a section: 

Foxconn chairman Terry Gou announced in 2011 that the company planned to manufacture 300,000 robots at a rate of 1,000 units a day and hoped to have 1 million robotic arms in 2014 for the benefit of the first batch of fully automated factories in five to ten years.

A vendor supplying equipment for automated production said that technically it is not a major problem for Foxconn to replace human workers with robots. However, using robots on the production line is only cost-effective for making homogeneous products and cuts cannot realistically be made in making mobile phones and tablet devices which have a more complicated manufacturing process, the vendor stated.

"The labor-intensive industry, such as OEM, can no longer sustain the company's growth," Gou said at a shareholder meeting on June 25. He further said that the company has been seeking a transformation of its business model in the past few years, which is expected to be crucial for Foxconn's continued growth in the next decade.

Eoin Treacy's view -

Factory automation represents an inexorable trend as companies attempt to contain costs and labour uncertainties. As the evolution of robotics proceeds, companies are becoming increasingly knowledgeable about what can and cannot be outsourced to automation. However robots have an important advantage relative to a human labour force. As pieces of technology, they are subject to Moore’s law and humanity is not. Therefore we can anticipate that as robotics continues to develop and innovation accelerates, robots will both displace humans and also develop products human hands are incapable of. 



This section continues in the Subscriber's Area. Back to top
July 03 2014

Commentary by Eoin Treacy

Vascular network bio-printing brings 3D-printed organs one step closer

This article by Stu Roberts for Gizmag may be of interest to subscribers. Here is a section: 

According to the University of Sydney study, the technique demonstrated better cell survival, differentiation and proliferation compared to cells that received no nutrient supply. In addition, Bertassoni says that it provides the ability to create large, life-supporting three-dimensional, micro-vascular channels quickly and with the precision required for application to different individuals.

"While recreating little parts of tissues in the lab is something that we have already been able to do, the possibility of printing three-dimensional tissues with functional blood capillaries in the blink of an eye is a game changer," he says.

Bertassoni explains that the ultimate aim of the research is for patients to be able to walk into a hospital and have a full organ printed with all the cells, proteins and blood vessels in the right place.

"We are still far away from that, but our research is addressing exactly that," he says. "Our finding is an important new step towards achieving these goals. At the moment, we are pretty much printing 'prototypes' that, as we improve, will eventually be used to change the way we treat patients worldwide."

Eoin Treacy's view -

3-D printing of living tissue that is fit to be transplanted into a human host would represent a game changer for the healthcare sector not least because it represents a technology that would become progressively cheaper overtime. It would also represent a bridge before genetics has developed to such a stage that our internal chemistry can be manipulated without the need for surgery except in emergency cases.



This section continues in the Subscriber's Area. Back to top
July 02 2014

Commentary by Eoin Treacy

3D Systems Surges With Rivals After Canceling at Conference

This article by Sarah Rabil and Caitlin McCabe for Bloomberg may be of interest to subscribers. Here is a section

The cancellation may be stoking takeover speculation, said Angelo Zino, an equity analyst from S&P Capital IQ in New York.

“We’re definitely viewing them as more of a potential takeover than we have in a long time,” Zino said in a phone interview.

Makers of 3-D printers, which layer materials to create objects, have been frequently speculated as takeover targets since Stratasys Ltd. bought startup MakerBot Industries LLC for about $400 million last year. The printers are gaining in popularity as they become more affordable, and the market is expanding after generating as much as $2.9 billion in revenue worldwide last year.

And 

Wamsi Mohan, an analyst with Bank of America Corp., said 3D System’s rally over the last two weeks has been driven by high short interest “compounded by extremely limited borrow resulting in very high borrowing costs driving a de-risking rally.” Mohan still recommends selling the shares.

The stock has risen 30 percent since June 12. Almost 19 percent of 3D Systems’ shares outstanding were sold short as of June 30, according to data compiled by Markit Securities Ltd.

3D Systems is still likely to pursue more takeovers this year, Mohan wrote in a research note today.

 

Eoin Treacy's view -

The 3-D printing sector has experienced a great deal of consolidation in the last few years as the major participants embarked on an aggressive acquisition campaign. Following powerful accelerations the respective shares pulled back sharply as the challenge of absorbing technologies and alien company structures took its toll on productivity. Despite the fact that they have lost consistency, the fact remains that additive manufacturing and rapid prototyping represent a growth industry which is likely to play an increasingly important role in the industrial sector. 



This section continues in the Subscriber's Area. Back to top
July 01 2014

Commentary by Eoin Treacy

Technology Catch-Up plays

Eoin Treacy's view -

The Nasdaq-100 is within striking distance of a new all-time high following a market leading performance from the 2009 lows. As the psychological 4000 level is approached I thought it might be instructive to look at some of the more established technology companies with reasonably robust dividend policies that may play catch-up. 



This section continues in the Subscriber's Area. Back to top
June 16 2014

Commentary by Eoin Treacy

Email of the day on European solar ETFs

Hello, I was wondering if you could analyse the solar power sector, in Europe there are no funds or ETFs to invest in this sector. In the US I found the Guggenheim Solar ETF. I notice that this ETF is very correlated with the heaviest weighted stock, First solar, so I will probably buy this as being in Europe we are fiscally punished if we buy us ETFs which are not compliant with UCITS regulations. Anyway First Solar seems to have a very interesting chart could you please comment thanks

Eoin Treacy's view -

Thank you for this question and following a search on Bloomberg I did not find a dedicated solar fund listed in Europe. I’ve reviewed solar companies on a number of occasions over the last year not least because they were rallying from deeply depressed levels and because the technological advances seen in the sector hold out the potential for a truly game changing innovation in the energy sector globally. Here is a link to the Tag for solar comments. 



This section continues in the Subscriber's Area. Back to top
June 11 2014

Commentary by Eoin Treacy

The coming digital anarchy

Thanks to a subscriber for this interesting article by Matthew Sparkes for The Daily Telegraph. Here is a section: 

The clever part is how the network reaches a consensus on what should be written in it. Otherwise there could be thousands of different blockchains, all disagreeing over who owns what.

The idea is that each and every transaction is broadcast by the person initiating it. Rather than telling the bank we want to spend £3, we tell the world. That transaction is bundled up with thousands of others and cryptographically bound into a “block” by “miners”.

Technically, anyone with a computer can be a miner – they just need to install a small piece of software. But it’s not easy to do: far from it.

Bitcoin “miners” are so called because gold miners traditionally have to put in a lot of work before they see any reward in the shape of precious metal. In the world of Bitcoin, miners have to crack an extremely difficult cryptographic problem before they are rewarded with some newly minted Bitcoins. That “block” is then added to the end of the blockchain and shared around the world.

To quote the wiki dictionary maintained by “the Bitcoin community” – perhaps the nearest you can get to an official explanation – “mining is intentionally designed to be resource-intensive and difficult so that the number of blocks found each day by miners remains steady … The primary purpose of mining is to allow Bitcoin nodes to reach a secure, tamper-resistant consensus.”

In other words, the blockchain remains both public and infallible. It’s a totally reliable and trustworthy record of who owns what, but also who owned what back through time, all the way to the creation of Bitcoin.

Eoin Treacy's view -

To describe bitcoin as a currency is to miss the point somewhat with regard to what the development of cryptocurrencies means. The blockchain is a facilitator of transactions whether financial, services oriented or communications. In essence it is a ledger anyone can access where anything can be recorded and archived.



This section continues in the Subscriber's Area. Back to top
May 30 2014

Commentary by Eoin Treacy

Blackstone Unit Foreshadows Google Path to Power Company

This article by Ehren Goossens, Mark Chediak and Jim Polson for Bloomberg may be of interest to subscribers. Here is a section: 

Meanwhile, Comcast, the cable giant, is in a pilot project with NRG in Pennsylvania that adds electricity to its cable, phone and Internet packages. AT&T last year entered the home automation and security business in 15 markets; while not yet planning power sales, it has introduced a smart thermostat that puts it solidly in the home energy-management business. It could do what Comcast and Vivint are doing.

Google’s $3.2 billion acquisition of smart-home startup Nest in February “ought to give utility officials a sinking feeling in the pit of their stomachs” since it makes clear the Technarians have begun to seriously eye at least the periphery of utility business if not its core, said Adrian Tuck, CEO of Tendril Networks Inc. a Boulder, Colorado-based energy-services management company.

Google Energy
While coy about its ultimate energy ambitions, Google is already a power generator through more than $1.4 billion in clean energy investments and holds a wholesale power license.

Last month it contributed $100 million to a program to promote rooftop solar power with SunPower Corp.

Nest, maker of the Learning Thermostat that memorizes and adjusts to users’ preferences, gives Google a leap-ahead presence in the burgeoning smart-home market at the precise time that power in the U.S. has begun to flow both ways with the rise of rooftop solar and other forms of decentralized, home-grown energy, collectively called distributed generation.

Though Tuck said he has no special insight into Google’s thinking, he believes that its Nest acquisition may well be a “Trojan horse” that gives Google a back door into the utility industry with the ability to leverage its smart thermostats into massive quantities of salable demand response even as it begins to compete directly with utilities with its own green-power projects.

Google spokesman Tim Drinan declined to comment on Tuck’s speculation.
Tuck’s company Tendril is also doing a brisk business in advising regional cable, home-security and home-automation companies how to exploit this opening. He said the utilities he talks to feel constrained by tradition, phobia or regulatory uncertainties from wading in -- a mistake he likens to Eastman Kodak Co. being slow to join the digital camera revolution.

 

Eoin Treacy's view -

As a society we need cheap abundant energy if we are to generate the type of productivity growth that can fuel a secular bull market. We don’t have it yet but the advent of unconventional oil and gas coupled with technological innovation across a whole host of sectors increases the likelihood that energy price inflation will be much less of a factor in the next decades than it was in the last one. 



This section continues in the Subscriber's Area. Back to top
May 20 2014

Commentary by Eoin Treacy

Patient receives 3D printed titanium hip

Thanks to a subscriber for this article from theengineer.co.uk which may be of interest. Here is a section: 

‘The benefits to the patient through this pioneering procedure are numerous,’ said Douglas Dunlop, consultant orthopaedic surgeon who conducted the operation at Southampton General Hospital. The titanium used to make the hip is more durable and has been printed to match the patient’s exact measurements – this should improve fit and could recue the risk of having to have another surgery. The bone graft material that has been used has excellent biocompatibility and strength and will fill the defect behind the bone well, fusing it all together.’

Over the past decade Dunlop and Prof Richard Oreffo, at Southampton University, have developed a translational research programme to drive bone formation using patient skeletal stem cells in orthopaedics.

The graft used in the operation is made up of a bone scaffold that allows blood to flow through it. Stem cells from the bone marrow will attach to the material and grow new bone, which will support the 3D printed hip implant.

In a statement, Prof Oreffo said: ‘The 3D printing of the implant in titanium, from CT scans of the patient and stem cell graft is cutting edge and offers the possibility of improved outcomes for patients.

Eoin Treacy's view -

The cost of customised manufacturing continues to decline as 3-D printing evolves from the lab to the mainstream. This has particularly exciting applications in the healthcare sector. Right now artificial joints can be printed to ensure a perfect fit. The first human bladder was 3-D printed last year. A working 3-D printed kidney has been embedded in a rat. It might take some time to gain approval for human testing but these developments suggest the long waiting lists for donor organs may become a thing of the past. The future holds even greater potential. For example think of the potential when customised DNA sequences can be 3-D printed. 



This section continues in the Subscriber's Area. Back to top
May 20 2014

Commentary by Eoin Treacy

Can crowdfunding give us safe fusion power by 2020?

This article by Dario Borghino for Gizmag may be of interest to subscribers. Here is a section: 

According to LPP Fusion chief scientist Eric Lerner, the vast majority of the financial resources have been allocated to ITER's approach to fusion power, while other avenues, such as the one being pursued by his team, have been largely neglected, despite being much cheaper. Using an approach he calls "focus fusion," Lerner says his team can obtain a crucial electrode for $200,000, demonstrate net power gain with $1 million, and solve the final engineering problems, leading to a functioning fusion reactor with just $50 million in funding.

Eoin Treacy's view -

Fusion has been described as the holy grail of the energy sector for decades and always seems to be about thirty years away. Part of the reason for this is because the government sector which originally funded nuclear research was more interested in weapons development than cheap, clean energy. The ITER project has been plagued by lack of funding, political struggles and a need to make one bet on a developing technology which has not yet been proven.

This project has clear parallels with Craig Venter’s success in sequencing the human genome. His company achieved the feat faster and more cost effectively than the government funded Human Genome Project. It remains to be seen whether the above privately funded initiative will be fruitful, but it seldom pays to bet against humanity’s capacity for innovation.



This section continues in the Subscriber's Area. Back to top
May 16 2014

Commentary by Eoin Treacy

Graphene and carbon nanotubes combined to create flexible, wearable supercapacitor

This article by Colin Jeffrey for GizMag may be of interest to subscribers. Here is a section: 

"The fiber supercapacitor continues to work without performance loss, even after ending hundreds of times," said researcher Dingshan Yu. So, when this supercapacitor material does become commercially viable, its ability to be bent continuously out of shape while maintaining its charge and structural integrity could lead to it being woven into clothing, backpacks, shoes, and other items to produce a wearable power system.

In turn, these could then power devices such as medical monitors, GPS devices or any of the other myriad accoutrements to our technological life that would allow us even more mobile freedom. It could also be woven into textiles for use by the military to power soldiers’ equipment, incorporated into other materials to form the case of a device that is also its power supply, or even double as the cover and the battery for an eReader.

But more than this, the low mass, high volumetric density of a graphene and carbon nanotube supercapacitor is so great that it may well provide a solution to a more pressing problem for electric vehicles: weight. At a mere fraction of the bulk of storage batteries, and capable of being charged and discharged for more than 10,000 cycles (less than 1,000 is the norm for rechargeable batteries), this type of superlight power storage could prove to be the answer to the electrical motor industry's prayers.

 

Eoin Treacy's view -

With rumours that endowment funds are beginning to treat investments in fossil fuel companies in the same manner as tobacco companies, demand for renewable energy technologies is likely to increase. One of the most persistent issues people have with renewable energy is how to ensure they can meet the base load requirements of utilities. 
 

 



This section continues in the Subscriber's Area. Back to top