Venture Capital Is Finally Starting to Get More Diverse. That's Great News for Entrepreneurs

A few weeks ago, I wrote about the lack of diversity in venture capital. Historically, a very small amount of venture capital has gone to companies with black founders. According to a study by Harlem Capital, a VC fund that backs diverse founders, just 105 companies with black or Latino founders have raised rounds of $1 million recently.

This lack of diversity is particularly pronounced at venture capital firms. Women accounted for 11 percent of venture capital firms’ investment partners in 2016, according to data released by the National Venture Capital Association and Deloitte. Latinos made up two percent of investment partners at the firms surveyed, while none of the firms employed black investment partners.

I’m pleased to say this may be finally changing. TechCrunch announced yesterday that Base10 Partners, a VC fund located in San Francisco, has closed its first fund. At $137 million, it’s the largest ever debut for a black-led VC fund. Base10 funds seed stage startups with between $500,000 and $5 million. 

I’m even more pleased to share other recent news that addresses this overlooked opportunity:

  • Arlan Hamilton, who (according to Fast Company) is the only black, queer woman to have ever built a venture capital firm from scratch, has a new $36 million fund dedicated exclusively to black women founders, called Backstage Capital.

  • Black Founders Matter, founded by Entrepreneurs Marceau Michel of Werkhorse and Kathryn Brown of ScoutSavvy, has a simple premise: sell T-shirts and merchandise, then use the proceeds to fund black- and female-led startups. Its goal is $10 million.
  • DarcMatter, co-founded by Natasha Bangsopaul and Sang Lee, is a matchmaking platform that connects fund managers actively raising capital with investors around the world. It uses a deep understanding of different cultures to network around the globe. DarcMatter hopes to facilitate connections between industry leaders and investors, especially when it comes to bridging East and West markets.

So why am I so bullish on investments into diversity and inclusion? Not simply because it is right and just, but also because I know the power of contrarian investing–and how it affects entrepreneurship.

In finance, a contrarian is one who attempts to profit by investing in a manner that differs from the conventional wisdom, when the consensus opinion appears to be wrong. A contrarian investor seeks opportunities to buy or sell specific investments when the majority of investors appear to be doing the opposite, to the point where that investment has become mis-priced. Warren Buffett is the greatest living contrarian investor.

In a white paper, Stephen Anness and Andy Hall (both fund managers for Invesco Perpetual) showcase these four cornerstones of contrarian thinking:

  1. A willingness to dispute conventional wisdom.
  2. A capacity to demonstrate creativity.
  3. A determination to reform the consensus.
  4. A high-conviction focus on long-term objectives.

So how can you apply this approach in your business? Try these strategies:

  • Hire talent other companies wouldn’t. Look to underrepresented potential human resources like veterans and inner-city youth.
  • Look for major trends–then do the opposite. If everyone is adopting low-touch customer service through AI, double down on the benefit of human customer service. Make that your competitive advantage. 
  • Prove people wrong. By definition, if you are a contrarian, people will call you crazy.  Babson College professor Daniel Isenberg said it best in his book Worthless, Impossible, Stupid: How Contrarian Entrepreneurs Create and Capture Extraordinary Value “To paraphrase Nobel laureate Albert Szent-Györgyi, entrepreneurship consists of seeing what everybody has seen, and doing what nobody has done.”

Inclusion isn’t just right for social justice reasons. It is right for financial reasons. The world is not simply male and white, and for too long investors have been overlooking great opportunities based on their own homophily. Perhaps that trend has begun to shift, leading to more underserved opportunity. Base10’s founders certainly think so.

Published on: Sep 18, 2018

DoJ requests documents related to Musk statement on taking Tesla private

(Reuters) – Tesla Inc said on Tuesday it received a request for documents from the U.S. Department of Justice over Chief Executive Elon Musk’s public statements in August about taking the electric carmaker private.

FILE PHOTO: Tesla Motors CEO Elon Musk speaks during the National Governors Association Summer Meeting in Providence, Rhode Island, U.S., July 15, 2017. REUTERS/Brian Snyder/File Photo

“We have not received a subpoena, a request for testimony, or any other formal process,” a Tesla spokesman said in an emailed response to Reuters questions about an investigation.

“We respect the DOJ’s desire to get information about this and believe that the matter should be quickly resolved as they review the information they have received.”

The DoJ declined to comment.

Federal prosecutors have opened a fraud investigation, Bloomberg reported bloom.bg/2D9F8mI. The report, citing two people familiar with the matter, said the department launched an investigation over Musk’s tweets in early August that he had secured funding for a buyout deal valued at $72 billion. He subsequently backed off.

Musk has already been sued by short-sellers such as Citron Research and is facing a probe by the U.S Securities and Exchange Commission.

Musk’s known hatred toward short sellers should help the government show his wrong intent, said Professor Eric Gordon of the Ross School of Business at the University of Michigan.

“Musk said ‘funding secured,’ which is not a prediction, but a statement in past tense which seems like a fact, and this could be a strong case from the government side,” he added.

Unlike the Justice Department, the SEC has no power to bring criminal charges. It could instead subject Musk to civil sanctions such as fines, relinquishing improper profits and a ban on running public companies.

“A probe can go either way but finding Musk guilty may have serious negative repercussions to Tesla’s stock price, which will badly hurt investors,” Morningstar analyst David Whiston said.

“For now this just brings more overhang to the stock and a probe will probably take months,” he said.

The billionaire CEO’s behavior has raised concerns about his leadership, with several Wall Street analysts and some investors urging Tesla to appoint a strong second-in-command.

Musk has been under intense pressure to prove he can deliver consistent production numbers for the Model 3 sedan, which is crucial to Tesla’s plan to become a mass-market automaker.

He said on Monday the company is facing delivery bottlenecks as it ramps up production to meet its target of 6,000 cars per week.

Tesla’s stock, which has lost about 25 percent since its gains on Aug. 7 after Musk tweeted about going private, fell 4.8 percent to $280.79 on Tuesday.

Reporting by Sonam Rai in Bengaluru; Editing by Arun Koyyur and Dan Grebler

The 1 Thing You Need to Make Your Content Go Viral

During this process, I’ve learned a lot about what it takes for content to go viral. And if there’s one central takeaway, it’s this: virality isn’t an accident. There’s a method to going viral, and while it’s not exact, it can be learned, engineered, and applied. The secret?

You have to apply the science of growth hacking and analytics to the art of engaging, impactful writing.

Viral Doesn’t Care About Your Feelings

First thing’s first. There’s a harsh truth you have to accept if you want to reliably engineer viral content:

Success has nothing to do with how you feel about your writing.

I’ve written posts from the depths of my soul about some of the most difficult experiences in my life. I was sure they would resonate with my audience and achieve massive engagement. But after I hit the publish button, they bombed so hard I had to take them down. On the flip side, I’ve had posts I cranked out in five minutes without thinking turn into some of my biggest hits.

The point here is that you can’t always trust your intuition when crafting viral content. There are patterns that you can learn and apply to your writing, but ultimately, it doesn’t matter what you think of the piece. The only thing that matters is the data.

This is why I test my content relentlessly. On my two main social profiles, LinkedIn and Instagram (@igbenlee), I’m constantly adjusting variables and looking for patterns. I’ve learned how to use the roughly 140 character-preview of a LinkedIn story to maximize views. I’ve learned the fine balance of too many vs. not enough emojis for engagement on Instagram.

It’s not an exact science. Sometimes a post will buck the trend, and you still need to write from the heart with real emotion. But there are reliable patterns for every platform and every audience. The only way to learn them is to test every possible variable and look to the data for guidance. Sometimes, that means throwing your intuition out the window.

Recycling: Good for the Planet, Good for Your Brand

Another cardinal rule I’ve learned is that while there are platform-specific formulas, generally if something works, it works. And if you have a piece of content go viral, that’s now a proven asset that you can use again and again.

Take a look at this status:

This post ended up getting 6 million views on LinkedIn and was one of my most viral pieces, bringing in serious revenue for my business. So why not leverage it elsewhere? I knew it had gained traction on LinkedIn, so I had a hunch it would do the same on Quora – the audiences are similar enough to resonate to the same style and format.

Here’s the same story, with slight modifications to fit the medium, on Quora:

Sure enough, it hit the Quora Digest and became one of my highest-performing answers.

The lesson? Be shameless in recycling your content.  

Too many creators fear that people will remember their content and call them out for reusing it.

“Oh, I mentioned that on Twitter, I can’t use it again.”

It’s bull****.

The Internet moves too fast now, and there’s simply too much content. Trust me when I say that no one remembers your stories, and if they do, they don’t care. In the content economy of 2018, you have to be smarter and more efficient. That means reusing the stuff that works.

Now, if my agency wants to do a campaign for an info product or a landing page, we lead with something that’s worked in the past. I keep a spreadsheet going with links to all of my high-performing content. If I need quick engaging copy, I can pull directly from that and make a few modifications instead of starting from scratch — and I know it’s good, because it’s worked in the past.

Find What Works and Use It

The content playing field on social networks is crowded, but there’s still plenty of opportunity. If you can define a niche that provides value to an audience, then test relentlessly to find out what works and what doesn’t, it’s possible to build a massive inbound funnel of traffic and leads — no matter what you’re trying to sell.

Just remember to test, find what works, and leverage it to the full extent possible.

What Alibaba's Success Reveals About the Value of Automating Strategy

With the speed of change and volume of market feedback today, as well as the advances in machine learning, Amazon, Alibaba, and others have proven the value of software driven strategy decisions.

For example, most e-commerce platforms today offer millions of products, with a changing mix daily and a changing market, such that it’s virtually impossible to manually predict a strategy for mapping customer demographics to products displayed online.

Only smart software can plow through the volume of live data, recognizing trends, customers, and match offerings to reality.

Alibaba, today the counterpart in China to Amazon, Ebay, and Google here, has demonstrated leadership in this area, and provides guidance for all of us to learn from in a new book, Smart Business, by Ming Zeng.

Zeng is the former chief of staff and strategy advisor to co-founder Jack Ma for over a decade, and outlines five key steps for automating decisions today as follows:

1. Log and use consumer behavior and product transaction data.

In my work with small businesses and startups, I routinely find owners who rely on guessing at key customer drivers, and let their passion drive product focus, rather than data. They think they are saving costs by not using the latest technology to capture data, and minimizing storage.

In China, even tiny bike sharing companies now have to digitally track every bike through GPS, and every mobile interaction between a bike and a rider to compete. No human or paper tracking systems are a competitive alternative.

The days of manual reservations and receipts are behind us, whether it be with rides, clothing, meals, or entertainment.

2. Configure every decision step into real-time software.

Businesses must capture every business decision activity, including customer relations, in digital software so that decisions affecting the activities can be automated and optimized through machine learning. This is a new class of software that can adapt in real time to market changes.

In the bike rental business, all operations and rental decisions are made completely by software, with no human intervention. The efficiency gain is tremendous.

The software directs humans and trucks to balance the tide of idle bicycles to other areas of a city where the demand is higher at the moment, rather than humans directing software.

3. Get data flowing, and machines talking to each other.

With today’s technology, data flow and coordination are readily achieved through common Internet protocols and application programming interfaces (APIs). These allow applications to communicate automatically and almost instantly, even over long distances, to mobile and IoT devices.

Way back in 2002, Jeff Bezos at Amazon issued an ultimatum to completely institute internal APIs within the company, and later to their millions of suppliers.

Through this focus, Amazon has become one of the first trillion dollar companies, and continues to expand its reach beyond books, e-commerce, and now into groceries with Whole Foods.

4. Record live data in full for all internal business elements.

The opposite of live data is static data that is sampled or profiled for analysis at a later date. Live data also requires metrics and infrastructure that can interpret and evaluate the data, and smart businesses must develop these in the algorithms they use in their data-intelligence engines.

5. Apply machine-learning for real-time software decisions.

Intelligent real-time software decisions are quickly replacing after-the-fact analytics. Only with full live data, built-in metrics, and artificial intelligence to iteratively improve the decision process, can your business keep up with the pace of change, and unique markets around the world.

Uber’s algorithms match car and driver, minimizing wait times and making mapping calculations in ways that no human dispatcher could match. Google search rankings are updated many times a second, based on new info and your profile changes. If your business is not powered by an algorithm, you don’t have a competitive business today.

These steps lead to what Zeng defines as a customer-to-business (C2B) model, where every direct interaction with customers sets into motion a striking reorientation of all business activities, and builds a feedback loop from customers. This allows businesses to automate all decisions productively, to scale and compete effectively, in tune with trends and new marketplaces.

President Trump's Tweets Top This Week's Internet News Roundup

In the past seven days New York decided it didn’t want Cynthia Nixon as its governor, Amazon’s owner elected to get into the education business, and a series of gas-line explosions hit north of Boston. But on the plus side, we also had Mark Wahlberg’s schedule to look at and a new Dolly Patron/Sia collaboration to listen to, so I guess it’s not entirely a hellscape out here? Maybe? While we ponder that idea together, let’s look at what else has been dominating the online conversation over the last week.

Is There Such a Thing as a Solemn Fist Pump?

What Happened: President Trump probably could’ve handled the anniversary of 9/11 better than he did.

What Really Happened: The anniversary of the September 11 attacks in 2001 is a solemn occasion, and one in which the United States turns to its president to see empathetic, strong leadership that comforts everyone and embraces the country’s greatest strengths during a troubled time. President Trump’s behavior on 9/11 this year was, well, maybe not that.

He did, to be fair, address the topic people wanted him to.

Funny thing about the image in that last tweet…

There was also this:

Oh, and this:

What could be more presidential?

As the media dazedly recounted Trump’s behavior during the day, others found a memetic outlet for those appalled by what was happening.

There. Doesn’t that feel almost cathartic? There’s nothing that can’t become content, if we try hard enough.

The Takeaway: To be fair, it could have been worse. No, really.

Bad Tweets, Part 2

What Happened: Apparently, when you’re prone to paranoid thinking, it’s very easy to become a truther for all kinds of things.

What Really Happened: Actually, speaking of things that could’ve been worse, let’s take a brief moment to discuss what might be the worst thing President Trump has done on Twitter yet. First off, please remember that an independent study by the Milken Institute School of Public Health at George Washington University found that the death toll in Puerto Rico after Hurricane Maria stands at 2,975 (and rising. Now, with that number in mind, consider that as recently as this past week President Trump was calling the government’s response to Maria “incredibly successful,” and complaining that the work was “an unappreciated good job.” OK, now that you know all of that, think about this:

Yes, that really was Trump outright denying the deaths of thousands of people, and claiming it was a lie motivated by politics. Just let that sink in for a second.

Of course, this was news because how could it not be? The president is outright being a hurricane impact denier, which is genuinely staggering.

Still, at least his Republican counterparts stood up against him. Right? Well, OK, Orrin Hatch and House Majority Leader Kevin McCarthy claimed they hadn’t seen the tweets, Lindsey Graham also questioned the death toll, and Marco Rubio tried to straddle a non-existent line.

Studies in leadership, all. (FYI, a couple of Republicans did eventually push back.)

The Takeaway: If this was, as some believed, an attempt to distract attention away from other subjects, it certainly worked well. Maybe a little too well.

All Those Witches, Lined Up and Offering Confessions

What Happened: The ongoing so-called “witch hunt” against those surrounding President Trump claimed another victim last week, as Paul Manafort pled guilty in court on Friday.

What Really Happened: On Friday, the one thing that political watchers had simultaneously been expecting and convinced was unlikely to happen—let’s call it the Schrödinger’s cat of the current political moment—finally happened: Former Trump campaign chairman Paul Manafort agreed to plead guilty to avoid a second trial.

The news resurrected a piece of Trump-related ephemera in at least one person’s mind.

Of course, people are already wondering how this impacts the big picture.

At the time of this writing, Trump’s Twitter feed is filled with Hurricane Florence-related retweets, but it’s genuinely only a matter of time before he responds to this news and revisits his previous statements about Manafort.

Still, at least the White House has its angle, as utterly unbelievable as it is.

Once again, Paul Manafort was the chair of the Trump campaign, and the man who chose the vice president. It’s more than a little disingenuous to claim that this has nothing to do with the campaign. But tell that to those around the president.

The Takeaway: There’s really only one way to end this, isn’t there?

Ringo Starr Would Be Appalled

What Happened: Just in case you thought that Thomas and Friends was a jolly series about happy trains and overweight controllers, the National Rifle Association has a shocking piece of information for you. Yes, the National Rifle Association.

What Really Happened: Everyone knows that, sometimes, there’s something in combining two flavors together to create a fun and exciting taste combination that will thrill the masses. Chocolate and peanut butter? It’s a game changer! The NRA and Thomas and Friends? Maybe a little less so, as it turns out.

Yes, you read that right. A show on the National Rifle Association’s streaming service dressed characters—you know, trains—from Thomas and Friends in KKK hoods. This is actually a thing that really happened, somehow.

It’s quite breathtaking that this was real—so real, in fact, that it became a story in its own right, because sure, why not? But at least Twitter was totally cool with it. Oh, no. Wait.

But how did Dana Loesch, who hosted the segment, feel about the whole kerfuffle?

The Takeaway: There really is just one way to wrap this one up. George Takei, do you have the pun-o-matic ready?

Emergency Services

What Happened: There’s one organization that even the federal government turns to in times of natural disaster, and with a hurricane headed towards the East Coast, last week seemed like the time to shine a spotlight on it.

What Really Happened: Late last week, Hurricane Florence made landfall on America’s East Coast, leading to a very difficult number of days for everyone whose homes, family, and loved ones in its path. But even before it hit, Florence was very much being considered a big deal.

With mandatory evacuations underway, people watched as the storm grew stronger, then seemingly weakened before getting stronger again. Was it going to slow down and linger in certain areas? It was hard to tell. Even NASA got involved. That mixture of surreal expectation and fear kept building throughout the week as the hurricane continued to approach.

But how serious were storm preparations on the ground? I mean, a state of emergency is one thing, but is there another way to measure these things? Turns out, the answer is yes, and in the most amazing way.

It’ll come as little comfort for those affected directly by Florence, but for everyone else, there’s some strange joy to be had in watching the Waffle House Index go mainstream. The world can still offer unexpected delights, it turns out.

The Takeaway: Stay safe, everyone.


More Great WIRED Stories

Evacuating for Florence, Tesla's Security Flaw, and More in This Week in Cars

Sure, we’re a little biased around here. But when storms bear down on this country’s coasts—scary ones, like Hurricane Florence (since downgraded to a tropical storm), threatening floods and high winds—our minds zero in on the transportation aspects. Some people need to leave their homes, but how? Some need to get to shelters, but when, and how quickly? And then, after the storm is over, someone needs to get in and assess it all. And then the residents need to come back. This week, WIRED Transpo spent some time thinking about these thorny questions, from the perspective of residents, government emergency planners, logistics-obsessed officials, even drone pilots.

Elsewhere in transportation world, we talked to people who had solved other intimidating issues: How to stop someone hacking your Tesla, how to get around flying cars’ battery problems, and how to help someone ride a bike at 168 mph. It’s been a week—let’s get you caught up.

Headlines

  • Tesla owners, remember to turn on your dashboard display PIN. WIRED security writer Andy Greenberg tells the tale of KU Leuven researchers who discovered that anyone with a bit of savvy and $600 in radio and computing equipment should be able to wirelessly read and decrypt Tesla key fobs, allowing them to swipe cars without a trace. Tesla rolled out its new antitheft PIN feature two weeks ago, and says no Model S units sold after June are vulnerable to the hack.
  • Don’t call it a concept car. Mercedes-Benz’s Vision Urbanetic is a “mobility concept,” a body-swappable hybrid that can haul people or packages, depending on its fancy. The concept is an excuse for the Germans to start thinking (and messaging) about new forms of moving stuff—without adding to cities’ already oppressive traffic issues.
  • Another pack of Germans, another mobility concept. Transportation editor Alex Davies meets BMW’s Vision iNEXT, an electric, autonomous, baby SUV that BMW hopes points to the future of driving. Or not driving, as it were.
  • Led by Los Angeles, 30 cities teamed up this week to create an online portal for collectively bargaining with electric car, street sweeper, garbage truck and bus manufacturers over the price of their products. Together, these cities will need to replace 115,000 vehicles valuing about $10 billion, senior writer Jack Stewart reports. And going electric is a lot easier when you can get a good deal.
  • As Hurricane Florence continues to batter the East Coast, it’s important to remember: When governors and mayors declare mandatory evacuations, they’re the products of years of planning and thought.
  • But some have more planning and thought than others. A disaster and urban planning expert tells me that some places just don’t have the resources for robust hurricane plans—and that the vulnerable, and especially those without cars, suffer for it.
  • As the rains continue to fall, Jack Stewart catches up with the professional drone pilots prepping to help out in the recovery effort—beef jerky, pretzels, and all.
  • Waze and tech company SpotHero install specialized beacons in Chicago’s labyrinthine tunnels, where no functioning GPS dare go. Just one problem: Locals love their shortcut tunnel secrets.
  • Lyft adds public transit data to its app in Santa Monica—meaning Californians might open it every time they travel, no matter the mode.
  • What’s better than a flying car? A flying car with all of its complex electric battery issues solved, because it’s in fact tethered to a power line for much of every trip. Eric Adams speaks to the (quixotic?) inventors behind the Karman Electric concept.
  • Meet Denise Mueller-Korenek, a bicyclist who hopes to beat the world motor-paced bicycle land speed record—a mere 167 mph—this weekend at Utah’s Bonneville Salt Flats. “Accelerating past the takeoff speed of a Boeing 757 on a bike seems impossible,” writes contributor Joe Lindsey, but when you’ve got a drag racer blocking the wind for you, it just might be possible.

Elon Musk Street Art of the Week

It’s been 11 days since Tesla CEO Elon Musk sat down for a 2.5-hour, wide-ranging interview with comedian and podcaster Joe Rogan. And it’s been about eight days, if the internet is to be believed, since someone in Melbourne, Australia, immortalized the interview with a mural of the [CEO himself taking a quick hit of a blunt.

Required Reading

News from elsewhere on the internet

In the Rearview

Essential stories from WIRED’s past

A look back at 2016 finds the top reason startups fail: Running a hardware business is super hard.

Manulife Financial Corp. – Strong Operating Performance And Attractive Pricing

Strong Operating Performance

Core ROE of Manulife Financial Corp. (NYSE:MFC) has increased from 11.5% in 2Q 2017 to 14.0% in 2Q 2018. The company is expected to continue this upward path in ROE from a combination of healthy business performance and cost control. Core earnings grew across its business segments.

Source: Company Slides

New business value grew at a healthy 24% during the same period while core expenses increased by only 4%. New business value is the present value of premiums from new businesses confirmed to receive from present to future.

Source: Company Slides

The company has targeted to release $5 billion in capital from legacy businesses by 2022. ALDA (Advanced Life Deferred Annuities) sales released $400 m of capital in 2Q 2018. It has announced the disposition of Signator, which will release around $100 m of capital in 4Q 2018. Since the beginning of 2018, the company has already released $940 m of capital.

Strong Financial Condition

Manulife Financial Corp. enjoys strong ratings from credit agencies.

Source: Manulife’s Credit Ratings

Summary of Company Data

Name of Company Country of Origin/ Exchange Traded Sector Stock Price Target Price
MANULIFE FINANCIAL CORP Canada/
TSX
Financial Services – Insurance – Life – Insurance – Life CAD22.84 CAD31.99
@ 14 Sept. 2018
COMPANY PROFILE

Manulife Financial Corp. together with its subsidiaries provides individual life insurance and individual and group long-term care insurance services. Its business segments are Asia Division, Canadian Division, U.S. Division, and Corporate and Other.

Manulife is the largest of the three major Canadian life insurers by market capitalization, ahead of Sun Life (NYSE:SLF) and Great-West Life (OTCPK:GWLIF). It provides financial protection and wealth management products and services to individual and group customers in Canada, the United States, and Asia. Manulife markets through the brand name Manulife Financial in Canada and Asia and primarily through the brand name John Hancock in the United States.

Stock Code MFC
Annual Dividend Yield 3.7%
Market Capitalization CAD45.31 billion
SUMMARY
Valuation Based on the Composite Valuation Indicator, the stock has a Target Price of CAD31.99 within a 12-month period. Our Target Price represents upside of 40.1% based on stock price of CAD22.84 as at 14 Sept. 2018.
Growth EPS Growth for the company is moderately positive.
Financial Condition This indicator is not available for some types of companies, e.g. financial institutions.
Quality of Earnings This indicator is not available for some types of companies, e.g. financial institutions.
Operational Efficiency This indicator is not available for certain types of companies, e.g. financial institutions.

Source: ProThinker – Think like a Pro instantly! – Stock Valuation

The Price Earnings (PE) ratio is the most frequently used valuation indicator for a stock. However, there are times when this ratio cannot be used, e.g. when the company reports a loss, or profit is so minimal that it results in an abnormally high PE ratio. Or Net Profit After Tax may be volatile and it is better to use Earnings Before Interest and Tax (EBIT) to value the company.

At the price of CAD22.84 as at 14 Sept. 2018, Manulife Financial is trading at a PE ratio of 10.4 times last 12 months’ earnings. This is a 27.7% discount to current fair Price to Earnings ratio of 14.4 times (Price based on the historical average PE of the company is indicated by the red line).

The Price to Sales ratio is another commonly used valuation indicator for a stock. It overcomes some of the limitations of the Price Earnings ratio in that it can be used even when the company is not making a profit or only making minimal profits. However, it should not be used by itself because a company may be achieving sales but not profits.

At the price of CAD22.84 as at 14 Sept. 2018, Manulife Financial is trading at a Price to Sales ratio of 0.8 times last 12 months’ sales. This is an 11.0% discount to the current fair Price to Sales ratio of 0.9 times.

Price to Cash Flow is an alternative method to value shares. This is because accounting profits can be subject to manipulation. Therefore, some investors prefer to value a company based on cash flows generated by the operating activities of the company. It also acts as a reality check to valuation measures such as Price to Earnings and Price to Sales. If a company generates high profits and sales but not operating cash flows, it could be heading for trouble because it is cash that pays the operating expenses. However, the Price to Cash Flow ratios of most firms are volatile and should not be used in isolation to determine the valuation of the stock.

The current Price to Cash Flow ratio of the company cannot be determined, e.g. when current cash flow is negative or when estimates are not available.

Price to Earnings, Price to Sales and Price to Cash Flow ratios all value a company based on what it is generating (i.e. profits, sales or cash flow). Price to Book ratio is different in that it values a company based on what it owns (i.e. its net assets). This is usually a suitable valuation indicator for a financial institution, which frequently revalues its assets and liabilities, or a company with huge asset base, e.g. utilities company.

At the price of CAD22.84 as at 14 Sept. 2018, Manulife Financial is trading at a Price to Book ratio of 1.1 times current book value. This is a 0.0% discount to the current fair Price to Book ratio of 1.1 times.

For stocks that have a history of paying meaningful dividends, the stock price is often dependent on how much dividend the company pays.

At the price of CAD22.84 as at 14 Sept. 2018, Manulife Financial is trading at a Dividend Yield of 3.7%. This is a 19.0% discount to its historical average Dividend Yield of 3.0% (Note: The lower/higher the dividend yield, the more expensive/cheaper the stock is).

Everybody has their favorite valuation indicator. Although most people would use Price to Earnings ratio to value stocks, others believe that profits are open to manipulation and Price to Cash Flow is a better measure. Yet others rely on Price to Sales ratio to value companies as this measure can be used even at times when the company is not profitable. Another way to value companies would be to value its assets, and typically the Price to Book ratio is used for that. Income investors who invest mainly for dividend income like to use the Dividend Yield to find companies that are undervalued.

We believe that each of these methods has its pros and cons. Therefore, we reckon that the best way is to use all five indicators and let empirical data find us the best possible combination of these five indicators that explains the stock’s price.

To find out more about our valuation methodology, click here.

Using a combination approach, we found a Composite Valuation Indicator that explains the stock price better than any of the standalone indicators above. And it gives you one signal to decide whether to buy, hold or sell the stock. The problem with using different standalone indicators is that they may give you different signals. Some may tell you it is overvalued while some tell you it is undervalued. This is no help to an investor who must make a definite decision whether to buy, hold or sell the stock.

Based on the Composite Valuation Indicator, the stock has a Target Price of CAD31.99 within a 12-month period. Our Target Price represents upside of 40.1% based on the stock price of CAD22.84 as at 14 Sept. 2018. We recommend that investors start to take profit after an upside of 25%.

Other Considerations

Of course, in deciding whether or not a stock is attractive, it is more than determining its valuation and future fundamentals. We need to consider other aspects of the stock such as growth, financial condition, operational excellence, cash flow, technicals, etc.

It is difficult to find a stock that is attractively valued and still pass every single criterion of the investor with flying colors. At times, we need to make certain trade-offs. For a full quantitative analysis, you could refer to this report.

Source of Data: Company description, historical financial statements data and price data are from gurufocus.com. Estimates are from marketscreener.com – Thomson Reuters.

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Enter the Age of Borderless Memes

English-speaking YouTube has established tropes—workhorse video concepts like unboxing, shopping hauls, and microwaving things you’re not supposed to. Over the last few years (but especially in the last six months), a new second-hand delight has started gobbling up YouTube viewers’ attention. It’s called mukbang, and the rules are simple: Acquire a truly astonishing amount of food, arrange your feast in front of you, hit Record, and gorge.

But mukbang clearly didn’t get its start in the anglophone world. It’s a portmanteau of the Korean words for “eat” (muok-da) and “broadcast” (bang song)—essentially, “eating show.” The trend took off on the South Korean streaming service AfreecaTV in the early 2010s and then slowly wended its way across the Pacific, acquiring new devotees and new cultural contexts. It isn’t really an outlier, either: Mukbang is just one of Asia’s most successful entrants to a new class of global internet phenomena—simple visual- and video-focused memes that are so basic in their appeal that the boundaries of geography and culture don’t apply.

In just over a year, mukbang has shifted from a Youtube niche to a mainstream trope—a high-calorie riff on the haul video. It’s acquired American-ness along the way with its food choices (more pizza, Taco Bell, and Chick-fil-A than Korean barbecue), and social cues (American eaters tend to chat more than their South Korean counterparts.) But mukbang has remained shockingly unchanged by its cross-continental journey. And that’s because it didn’t have to change. It was a borderless meme, ready to travel across cultures and continents in its original form.

Mukbang’s success as a borderless meme has precedent. Earlier this year, a Chinese meme called “Karma’s a bitch” struck a similar vein of gold: Young Weibo users post clips of themselves shabbily dressed and without makeup, then, to the sounds of a scene from CW’s Riverdale (Veronica Lodge saying “Karma’s a bitch”) and Kreayshawn’s “Gucci Gucci,” reemerge triumphant in full glam hair, clothes, and makeup. It’s the dramatic glow-up every adolescent hopes for, condensed into a few shareable seconds—and it wasn’t long until the Roots were doing it on the Tonight Show. These continent-crossing memes don’t even have to be that complicated. Take Japan’s Hadouken craze (in which people take photos that make it appear one of them can fling the others across the room with magic) or China’s (questionable fad of putting pantyhose and heels on dogs, which caught on everywhere because of its weird visual intrigue.

South Korean mukbangs aren’t silent—the ramen slurping, fried chicken ripping, and other lip-smackings and munchings are part of the appeal—but they are often nearly wordless. The only language consistently involved is the live feed of comments from viewers, who can also show their appreciation by making micropayments during the stream. As soon as the South Korean mukbang trend became a lucrative craze—some of the top broadcasting jockies reportedly earn $10,000 per month before sponsporships—it jumped continents.

Mukbang’s first big US YouTube spotlight came in 2015, when Fine Brother’s Entertainment made a video showing popular YouTubers like Tyler Oakley reacting to South Korean mukbang. Some were bored by the low-action spectacle, others disgusted, but, importantly, none of them were confused or alienated. “I am delighted by this,” says Oakley, who had about 7 million subscribers at the time, in the video, grinning as a young woman lip-smacks her way through a chicken wing. “I hope they’re monetizing.”

Oakley wasn’t alone. The birth of the American mukbang was only weeks away. YouTuber Trisha Paytas, probably the most popular American mukbanger, with over 4 million subscribers, started posting her own mukbang videos soon after. In the time since, the Western mukbang trend has swelled on YouTube and Twitch, where hundreds of mukbang-dedicated accounts have sprung up. In the last few months, it’s become fodder for BuzzFeed quizzes and a very active hashtag, while attracting YouTube mega-celebrities like James Charles, Manny Mua, Jeffree Star, Shane Dawson, Tana Mongeau, and, yes, Logan Paul. Even former TV stars like Josh Peck and Kathy Griffin are doing it.

In the past, international memes have had only niche appeal—usually among people already interested in the original creator’s culture and language, like Western anime fans. But now memes have begun to cross continents and cultures much more easily—and there’s a reason for that. Internet connectivity has increased worldwide, and internet culture has moved from its text-and-emoticon roots to something that thrives on images and video. Creating a truly global meme becomes more possible because we’re leaving language—with its pesky regional limitations—almost entirely behind.

But that doesn’t mean that every relatively wordless clip is going to be an automatic smash hit. Things that require specific regional knowledge, like politics or news events, won’t fly. The most successful of these memes echo Socially Awkward Penguin or Philosoraptor: By appealing to basic experiences that the majority of humans share, these memes have a longer life cycle than our modern-day digital ephemera and are simple enough that each creator can graft their own cultural and emotional context onto them.

Mukbang in its original form is exactly that: The people in front of the camera are ciphers shoveling food down their gullets. The appeals in South Korea and in the West vary widely: Some viewers come for the apparently ASMR-inducing audio component, others tune in for the vicarious thrill of watching someone else binge-eat, some are drawn to the fetishistic appeal, and many others find comfort in digital dining companions.

What we’re witnessing is the infancy of global internet culture through the birth of its first-born—the borderless meme. Still, it’s too early to tell if these borderless memes will really bring the world closer together or if a shared video vocabulary will be too limited to create valuable connections. Maybe the ideas that spread will be too universal for the average person to realize they’re giggling along to a trend that was born on the other side of the world, though the fact that mukbang has retained its Korean name might suggest otherwise.

But even if these memes are just examples of cultures performing the same actions alone, simultaneously, there’s something hopeful about knowing that, stripped of language and other cross-cultural confusions, people relate to the strangers who cross their screens.


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To Solve Flying Cars' Battery Problem, Tie Them to Power Lines

Of the many challenges facing the nascent flying car industry, few turn more hairs gray than power. A heavier aircraft needs more power, which requires a bigger battery, which weighs more, thus making a heavier aircraft. You see the dilemma. So how do you step out of that cycle and strike a balance that lets you fly useful distances at useful speeds without stopping to recharge?

One startup thinks the answer lies in another question: Who needs a big battery, anyway?

San Francisco-based Karman Electric proposes dividing the need for power from the need to carry that power through the air. It wants to connect passenger-carrying electric air taxis to dedicated power lines on the ground, like an upside-down streetcar setup. The aircraft will carry small batteries so they can detach from the lines when necessary, but they’ll get most of their juice from their cords, allowing them to cover long distances at high speeds.

A few more questions, then. What happens if the cable gets jammed, or a bird flies in its path, or a helicopter wanders by? What if there’s a power loss on the ground, or if two vehicles get their cords tangled? How can you traverse bodies of water or rugged terrain? And doesn’t tying a flying car to the ground defeat the whole purpose?

LEARN MORE

The WIRED Guide to Drones

Karman cofounder Chiranjeev Kalra, an alum of Virgin’s Hyperloop One program, has a surprisingly reasonable set of responses to this unsurprisingly wide array of concerns. For starters, the vehicles will pull power from the ground only at altitudes of 30 to 100 feet, outside of dense population centers. If they’re flying through a city, or approaching their destination, they can disengage from the power line, pull in the tether, and run off their own battery, flying as high as 3,000 feet. “This portion of the flight is untethered and operates on batteries,” Kalra says, “typically the so-called first or last mile of intercity travel.”

The idea of routing power straight from the grid to a moving electric vehicle is as old as the moving electric vehicle. Trolleys have been doing it for more than a century. In cities like San Francisco, buses and streetcars use this setup. It’s common for trains, too. The setup has even been broached as a way to run long-haul trucks on electricity instead of diesel. Karman simply inverts the idea, combining the flexibility of an air vehicle that can detach and go anywhere whenever necessary—something trains can’t do—with the efficiency of a grid-powered system.

Named for Hungarian aerospace engineer Theodore von Kármán, the company debuted the idea with a demonstration at Bentonville UP, a secretive, invitation-only air taxi conference held this past weekend in Bentonville, Arkansas. Karman engineers strung a pair of wires between two supports and flew a small quadcopter drone back and forth between them. Karman is developing a full-scale, six-rotor demonstrator now and expects to start testing by the end of the year.

A full-scale system could, Kalra says, transport 10,000 people per hour for hundreds of miles between cities, cruising in close formation at speeds north of 200 mph. That makes it more capable than an aircraft that can use only as much power as it can afford to carry. And while it doesn’t eliminate the need for room on the ground, Kalra says stringing those power lines is still easier than building, say, a hyperloop.

“This is a completely open system,” Kalra says. “Aircraft can leave or enter the power track at any point and land wherever they need.” At those entry and exit points, the “WireRunners” that connect to the ground track would be “flown” down via built-in drones, then retracted via the same setup at the end. And if a cable does get caught on something, a quick-release mechanism stops it from taking down the aircraft—which should have enough battery life to manage a safe landing.

Of course, the key question isn’t how this idea compares to the hyperloop. It’s how it compares to solutions that actually exist—like commercial air travel, highways, trains, and intercity bus networks. Could it compete on efficiency or cost? How long would it take to build, and how much would it cost to maintain? Large infrastructure projects like laying hundreds of miles of power cables are always complicated and expensive, at least in the United States. Throw in the serious regulatory concerns the flying car space already faces, and this looks like a rather hard sell.

But if Karman can handle those concerns without getting itself tied up in knots, at least it won’t have to worry about where its power is coming from.


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