Joseph To Pharaoh: Save Surplus Grain For Inevitable Droughts And Famine

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We all know the story learned in childhood in bible studies, or the movies that portrayed it. As an advisor to the Pharaoh, Joseph counseled him to set aside surplus grain from bumper harvests so that the country’s people would not go hungry or starve when the next drought came and farmers would not be able to grow grain. This advice, that avoided a famine, was much appreciated and admired by Pharaoh as it saved Egypt from destruction.

Sadly, in modern times, central bankers no longer heed this well-worn advice. Though budget surpluses have been achieved occasionally, the rule today is quite different. Rather than aspiring to achieve surplus, today’s central bankers simply print more money electronically. Magically, they expand the money supply to pay for spending and create ever-larger deficits and expand the national debt.

In order to pay for the administration’s huge tax cut for corporations, some of the burden will fall to middle class taxpayers to make up some of the shortfall. The balance will be paid for by additional debt creation by the Fed.

Nationally, the annual deficit has reached $1 trillion. We’ve been there before, but never with a national debt burden of over $21 trillion where we find ourselves today.

Private Lives, Private Finances

In our own private lives, we never get the luxury to print money like central banks to pay our bills. Anyone nurturing such a fantasy should jettison it now.

The only way we can reliably sail through life with a modicum of financial safety and comfort is to follow Joseph’s advice. Save our own personal surplus and store it for the next drought or famine.

Spend Less, Save More

In practical terms, this simply boils down to saving on a regular basis, and never spending more than you earn. If you always spend less than you earn, mathematically, you’ll never run out of money.

However, this mathematical formula breaks down somewhat, when we must finally retire from the active work environment. Some of us will have to do this due to sickness, physical disability or even an accident that renders us unable to work.

Others, more fortunate, will face retirement on a more proactive basis, choosing to retire at a time of our own choosing. Whatever the situation, while in retirement mode, earnings from active work will no longer flow into our coffers.

This is precisely when Joseph’s brilliant advice will pay off for those of us who have taken his message to heart and prepared accordingly.

And Then There Was Inflation

In Genesis, when the Creator deemed it, “Then there was light.” For the retirement cohort, then there was inflation.

Perhaps we scrimped and saved all of our working lives, diligently preparing for the day the paycheck would no longer show up in the mailbox. But even some of those good Boy Scouts and Girl Scouts, always prepared in all things, did not prepare their financial future for one where the prices of goods and services always rise.

Failing to take account of this one small detail can easily derail even the best saver’s retirement savings plan.

Bonds Can’t, CDs Won’t

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Bonds can’t do it. CDs won’t do it. Each of these investment vehicles pay a fixed rate of interest. No matter what inflation does in the economy, your bond or CD couldn’t care less. You can beg or plead, but the bank that issued your CD won’t raise your interest income. It will stay the same amount, from the day you bought it, till the day it matures.

Bonds are no different. When you buy a bond, whether a corporate or treasury issue, whatever the coupon rate is, that’s the rate you’ll receive for the length of time you hold it.

If you buy the bond at par when first issued, and the yield is fixed at 3%, you’ll receive $3.00 of interest annually for each $100 of face value you purchase. But if inflation is running at a 2% annual run rate, your return looks like this:

3%-2%= 1%

When taxes on that ordinary interest is figured in at the state and federal level, your return is diminished once again by your combined tax rate. Assuming a combined rate of 25%, this might bring your interest return down to something closer to .25%.

3% X.75= 2.25%

2.25%-2% inflation= .25%

Once inflation breaches the 2% mark, the interest you receive will go negative. The only party to gain from the transaction will be Uncle Sam who will happily collect taxes from your interest payments. Inflation was reported recently at a rate .5% higher than the previous month.

Try and take this case to the bond issuer and ask for more interest on your bond investment. You won’t get very far. The interest payment on your bond is fixed. The semi-annual or annual interest payment you receive will be the same in the tenth year as it as in the first year you bought it. Plead as you might that inflation is ravaging the purchasing power of those interest payments, the issuer will have only deaf ears for you.

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Dividend Growth Stocks To The Rescue

There is an investment class that won’t send you home begging every year. In fact, dividend growth stocks are named as such because they actually increase your income each year. They do this by growing their dividend, year in and year out.

No Guarantees, But…

Of course, nothing is guaranteed. But if the investor is willing to do some research on high quality companies with long, enviable histories of increasing the dividend on a regular basis, if good stocks are chosen, they can battle inflation. And since these types of stocks have established records, the investor never has to go begging, hat in hand, for a raise.

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The inflation-beating quality is basically understood and built into this type of investment.

Dividend Kings, those stocks that have 50 years or more of dividend raises under their belt, or Dividend Aristocrats, companies that are part of the S&P 500 Index and have raised their dividend for at least 25 years, are always a good place to start prospecting for these type of reliable dividend payers and growers.

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Strategy Session: Here’s One That Makes The Argument

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AT&T (NYSE:T) is a company familiar to most consumers and investors. If you watch TV, it is hard to miss this company’s deluge of constant advertising.

If they’re not trying to sell you their phone, internet and TV packages, they’re offering you a free phone to sign on to one service or another. Other ads are aimed at persuading businesses to sign on to their specialized business services.

If you haven’t been hiding in a cave for the last year, you’re also familiar with their bid to acquire more content to sell through their many services by acquiring Time Warner (NYSE:TWX).

The drama is nearing the end game as the Justice Department has challenged this combination as anti-competitive. In a November 20, 2017 Justice Release, Justice believes that concentrating too much media content in one company will adversely affect AT&T’s customer base, causing them to pay higher prices for the content they consume.

The first round in court began in early March, when the company and T sketched out their early arguments. The judge is scheduled to render judgment in the beginning of June.

T believes that the Justice Department is doing the president’s bidding, trying to block the merger due to the president’s antagonism towards CNN, which he refers to as “fake news” purveyors.

A group of former top Department of Justice lawyers are arguing the Trump administration’s attempt to challenge the AT&T-Time Warner merger violates the Constitution if the action is punishment for CNN’s news coverage.


Media reports have suggested that the DOJ’s recent threats against AT&T are politically motivated, noting Trump openly pledged to block the merger when it was announced last year, just weeks before he was elected president.

Source: New York Post

I am among the analysts that believe that T will prevail in this battle, and that it will acquire a very valuable asset that will help to expand AT&T’s footprint and add large revenue and profit to the bottom line. Though the merger will cost AT&T $85 billion to effect this transaction, the eventual accretion of revenue and profit will be sufficient to pay the additional interest that will accrue from the new debt.

Joseph Counsels Us

Again, remember what Joseph counseled Pharaoh? Save surpluses for when we’ll need them come the next drought or famine.

For those of us planning for retirement, our big drought or famine will come once we leave the work force. No regular paycheck from work equals the biggest drought and famine we’ll ever face.

So, we need to get our affairs in order, preparing for this eventuality all our working lives. Always spending less than we earn is just the beginning. It is the foundation that allows our surplus to accumulate.

Then, it is what we do with those surpluses that determine if our grain will last a lifetime.

Buying a stock like AT&T will serve all of our purposes. Investing our surplus in a company like this will see our grain grow inexorably as it sits in the storehouse, waiting to be used. We will see our surplus grow by the regular dividends they pay as well as the regular increases in the dividend. If we choose to reinvest those dividend payments into additional shares, our surplus will grow from this double compounding effect.

And when we finally reach the day we earn our gold watches and punch the clock for the very last time, we can count on AT&T to continue raising our income like clockwork. AT&T will help to keep our heads above the inflation waves and preserve our purchasing power.

Here’s a compelling illustration of the length and reliability and growth of AT&T’s dividend.


You can see that AT&T has been nothing if not consistent in raising the dividend by a penny per quarter for years on end. It is true that raising the dividend the same amount each year, as the previous year’s divisor grows bigger, the next year’s percentage increase grows smaller. However, one penny divided by last year’s 49 cent quarterly dividend is still trending above inflation that the Fed continues, but fails, to get up to the 2% level.

$.01/$.49 = 2.04% increase

Gather Grain Opportunistically

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If you’re willing to take a more activist approach to your investing, as we do for our subscribers, it is always possible to buy one stock or another when it goes on sale.

AT&T is a company whose dividend yield has trended in the 5% range for quite some time. Whenever it drifts one way or the other, it eventually returns to that well-defined trend line.

As investors fretted that the Time Warner deal would necessitate too much debt that would sink AT&T’s ship, they sold off their shares. As they did so, shares moved from weak hands to strong hands and fell into our buy zone. Our limit order at $32.60 was executed and we received a very healthy 6.01% yield. Weeks later T raised the dividend to $2.00 per share, giving us a yield on cost of 6.13%.

6.13%- 5.0% usual yield = 1.13%

1.13% / 5.0% = 22.6%

When’s the last time you got a 22.6% raise at work?

When’s the last time your wheat field yielded 22.6% more grain than the previous year?

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AT&T’s Prospects Going Forward

In light of the amount of cord-cutting we’re witnessing in the cable ecosystem, AT&T is looking to aggregate large amounts of TV and movie content, which it can sell through its various streaming services. Time Warner embodies such content in its enormous library of TV and movie properties. In turn, the large recurring revenue streams that this content represents will be available to investors in the form of growing revenue and profits, which fund the dividend.

In order for a dividend to be sustainable, free cash flow derived from revenues and earnings must be sufficient to cover it. Because I believe the merger with TWX will ultimately be approved, AT&T will have additional resources at its disposal to pay for the dividend.

TWX’s free cash flow of $4.2 billion, added to T’s $17.2 billion will make for a formidable trove of cash to cover the dividend going forward.

Time Warner’s dividend of $1.61 translates to a payout ratio of just 24.3% as compared to AT&T’s much higher payout ratio of 41.3%. TWX’s very low ratio means that when the merger is completed, the combined companies will have enormous resources to not only sustain but grow the dividend.

Time Warner Profit Drivers Going Forward

Since Time Warner is an integral part of this thesis, the future profit drivers of each of its entertainment segments take on added significance. The company, in its April 26th release, is giving guidance of single digit to double-digit growth in subscription and operating income.



For the full year 2018, the Company continues to expect Turner’s subscription revenues to increase in the mid single-digits compared to the prior year. Additionally, for the full year 2018, the Company continues to expect growth in Turner’s programming costs and total expenses to moderate compared to 2017. The Company expects subscription revenues in the second quarter of 2018 to grow at a similar rate as for the full year. Scatter pricing for advertising sales at Turner’s domestic entertainment networks has increased high single- to low double-digits in the second quarter to date compared to the prior year’s upfront. The Company anticipates flat to low single-digit growth for Turner’s total advertising revenues in the second quarter of 2018 compared to the prior year quarter. For the second quarter, the Company expects Turner’s total expense growth to be in the low double-digits compared to the prior year quarter, primarily due to higher sports costs, including costs related to Turner’s rights to air NBA playoff games, and increased original programming expenses. As a result, Turner’s Operating Income in the second quarter of 2018 is expected to decline modestly compared to the prior year quarter.

Home Box Office

The Company anticipates Home Box Office’s subscription revenue growth rate in the second quarter of 2018 will be in the low double-digits relative to the prior year quarter. In addition, the Company expects Home Box Office’s programming costs to increase in the high teens in the second quarter of 2018 relative to the prior year quarter, primarily reflecting the timing and mix of programming. The Company anticipates Home Box Office’s revenue growth will more than offset expense growth and, as a result, expects its Operating Income to increase slightly in the second quarter of 2018 compared to the prior year quarter.

Warner Bros.

The Company expects Operating Income at Warner Bros. to increase at a rate well into the double-digits in the second quarter of 2018 compared to the prior year quarter primarily due to higher television licensing of both television and theatrical product.

Source: Time Warner Business Outlook Release

The Fill-The-Gap Portfolio

The FTG Portfolio contains a good helping of dividend growth stocks, like AT&T. It was built with the express purpose of benefiting from this and other strategies.

Three years ago, I began writing a series of articles on December 24, 2014, to demonstrate the real-life construction and management of a portfolio dedicated to growing income to close a yawning gap that so many millions of seniors and near-retirees face today between their Social Security benefit and retirement expenses.

The beginning article was entitled, “This Is Not Your Father’s Retirement Plan.” This project began with $411,600 in capital that was deployed in such a way that each of the portfolio constituents yielded approximately equal amounts of yearly income.

The FTG Portfolio Constituents

Constructed beginning on 12/24/14, this portfolio now consists of 23 companies, including AT&T Inc (T)., Altria Group, Inc. (MO), Consolidated Edison, Inc. (ED), Verizon Communications (NYSE:VZ), CenturyLink, Inc. (NYSE:CTL), Main Street Capital (MAIN), Ares Capital (ARCC), British American Tobacco (BTI), Vector Group Ltd. (VGR), EPR Properties (EPR), Realty Income Corporation (O), Sun Communities, Inc. (SUI), Omega Healthcare Investors (OHI), W.P. Carey, Inc. (WPC), Government Properties Income Trust (GOV), The GEO Group (GEO), The RMR Group (RMR), Southern Company (SO), Chatham Lodging Trust (CLDT),Iron Mountain, Inc. (IRM), Roku (NASDAQ:ROKU), Helios and Matheson (NASDAQ:HMNY) and LTC Properties (NYSE:LTC).

Because we bought most of these equities at cheaper prices since the inception of the portfolio and because most of our stocks have increased their dividends regularly, the yield on cost that we have achieved is 8.28% since launch on December 24, 2014. Current portfolio income, including recent dividend raises by AT&T and Realty Income, and our newest addition of AT&T shares, and LTC Property now totals $34,098.78, which is $1162.92 more annual income than the previous month. This represents a 3.53% annual income increase for the portfolio.

When added to the average couple’s Social Security benefit of $32,848.08, this $34,098.78 of additional supplemental income brings this couple annual income of $66,946.86. This far surpasses the original goal set to achieve a total of $50,000.00, which is accepted as a fairly comfortable retirement income in many parts of the country. That being said, this average couple now has the means to splurge now and then on vacation travel, dinners out, travel to see the kids and grandkids and whatever else they deem interesting.

Taken all together, this is how the FTG Portfolio generates its annual income.

FTG Annual Dividend Income

Chart source: the author

Your Takeaway

As discussed in “Even A Cloudy Crystal Ball Comes Into Focus Twice A Year,” paying too much attention to the everyday price swings, even with stodgy stalwarts like AT&T can drive investors totally batty.

We used a biblical story to illustrate the brilliance of saving for a rainy day. Joseph saved a nation. You can save your retirement.

It can’t be repeated often enough, especially in a nation that constantly spends more than it earns. This applies to the nation as a whole as well as a majority of individuals who live within it. Spend less than you earn and you’ll have taken the first step towards financial independence.

The next step on your retirement journey is to invest your newfound surplus in companies like AT&T and other Dividend Aristocrats. A dividend a day will keep the droughts and famines away.

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When AT&T’s yield shot up from its usual 5% range to 6.01% we could not stand by passively and look that gift horse in the mouth. We acted, for ourselves, our readers who follow me, and subscribers.

It is my aim to share a lifetime of investing lessons I’ve learned with you.

Your Engagement Is Appreciated

As always, I look forward to your comments, discussion, and questions. Have you been able to draw any interesting lessons from childhood into your investing? Please share those in the comment section along with how you approach these situations in your own portfolio and how you arrive at your decisions.

Author’s note: Should you be interested in reading any of my other articles detailing various strategies to enhance your returns on a dividend growth portfolio, you will find them here.

If you’d like to receive immediate notification as soon as I write new content, simply click the “follow” button at the top of this article next to my picture or at the bottom of the article, then click “Real time alerts.”

Disclaimer: This article is intended to provide information to interested parties. As I have no knowledge of individual investor circumstances, goals, and/or portfolio concentration or diversification, readers are expected to complete their own due diligence before purchasing any stocks mentioned or recommended.

Disclosure: I am/we are long ALL FILL-THE-GAP PORTFOLIO STOCKS.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Cyber Saturday—As Blockchain Week Kicks Off, Remember The DAO

Good afternoon, Cyber Saturday readers.

In honor of “blockchain week,” which is kicking off in New York City, I’ve been thinking about the security of smart contracts, self-executing computer programs designed to encode business relationships. A smart contract might codify, for example, an agreement like this: If Justify, a racehorse, wins the Kentucky Derby, pay $10 in Bitcoin to some lucky fellow’s digital wallet. The code eliminates the need for a bookie.

Now imagine a future in which such contracts automate tasks once relegated to lawyers, pencil-pushers, and other intermediary parties. Blockchain boosters dream of a day when they can route around middlemen with these sorts of self-driving computer programs, thereby making markets more efficient, so the thinking goes. There’s a snag though: Smart contracts are software applications, and software applications have bugs.

Sometimes, as with The DAO, an ill-fated, decentralized venture capital fund built on Ethereum, a popular cryptocurrency network, those bugs can be ruinous. Hackers stole $50 million in cryptocurrency from the project in 2016 thanks to a simple “reentrancy” flaw. The bug allowed an attacker, or group of attackers, to continually withdraw money from the smart contract-powered organization until its coffers had been thoroughly pilfered.

Similar flubs abound in the field of cryptocurrency. Chris Wysopal, cofounder and chief technologist at Veracode, an application security shop bought by CA Technologies for $614 million in cash last year, gave a keynote talk at Collision conference in New Orleans earlier this month in which he provided an overview of the security challenges posed by smart contracts. “The blockchain is really secure, but the things that have to interact with it, those things aren’t secure,” Wysopal told the audience. “It’s probably one of the toughest problems right now” in security, he said.

Although I did not catch Wysopal’s talk in person (you can watch it here), I chatted with him afterward at B.B. King Blues Club and Grill and in between jazz sets at various bars along Frenchman Street. He said that if he were a thief, smart contracts are where he would focus the majority of his attention and energy today. Target the youngest projects with the worst quality assurance processes, the highest valuations, and the weakest defenses. It’s a recipe for success; in this world, baddies no longer have to worry about monetizing the data they steal. They can steal (virtual) money itself.

If you happen to be in New York for blockchain week, temper your enthusiasm with that alarum. It’s what the smartest folks will do.

Have a great weekend.

Robert Hackett


[email protected]

Welcome to the Cyber Saturday edition of Data Sheet, Fortune’sdaily tech newsletter. Fortune reporter Robert Hackett here. You may reach Robert Hackett via Twitter, Cryptocat, Jabber (see OTR fingerprint on my, PGP encrypted email (see public key on my, Wickr, Signal, or however you (securely) prefer. Feedback welcome.

Report: Apple and Pandora Join Spotify in Ending Promotion of R. Kelly Music

Apple Music and Pandora have removed certain songs by R. Kelly from promoted playlists, according to music news sites Pitchfork and The Blast, adding to the list of streaming music services that have made the hit artist’s music more difficult to find after allegations of sexual misconduct.

R. Kelly’s music no longer shows up in Apple Music’s ‘Best Slow Jams of the 90s, Vol. 1‘ and Vol. 2 playlists, Pitchfork reported. However, playlists titled ‘R. Kelly Essentials,’ ‘R. Kelly: Influences,’ and ‘Inspired by R. Kelly’ are still available.

Pandora did not confirm or deny that it was removing R. Kelly from playlists, however, the company said it will no longer “actively promote artists with certain demonstrable behavioral, ethical or criminal issues,” according to a statement. The music-streaming company has been working on updating its policies, including handling artist misconduct.

“We approach each of these scenarios on a case–by–case basis to ensure we address components true to Pandora’s principles while not overreaching and avoiding censorship,” Pandora said in the statement.

On Thursday, Spotify announced that it would no longer include Kelly’s music on its curated playlists, as part of a new policy.

“We are removing R. Kelly’s music from all Spotify owned and operated playlists and algorithmic recommendations such as Discover Weekly,” Spotify told Billboard. “His music will still be available on the service, but Spotify will not actively promote it.

“We don’t censor content because of an artist’s or creator’s behavior, but we want our editorial decisions — what we choose to program — to reflect our values. When an artist or creator does something that is especially harmful or hateful, it may affect the ways we work with or support that artist or creator.”

Apple Music’s removal of R. Kelly from playlists reportedly “pre-dates” Spotify’s recent similar decision, according to Pitchfork. Fortune contacted Apple for further information and will update as necessary.

R. Kelly has been accused of multiple counts of sexual misconduct dating back to the 1990s. He settled multiple lawsuits with women, and was acquitted by a jury on charges of possessing child pornography. Recently BuzzFeed and Rolling Stone have published pieces alleging abusive and controlling behavior.

Last month, members of the Time’s Up Women of Color committee joined the #MuteRKelly movement, and women including director Ava DuVernay and showrunner Shonda Rhimes called on women of color and companies—including Spotify, Apple Music, and Pandora—to boycott R. Kelly.

R. Kelly has denied the allegations made against him, providing the following statement to BuzzFeed following the Time’s Up call to #MuteRKelly:

Lots of Doctors Recommend Weed Without Understanding It

If you go to a doctor and ask them to recommend you medical marijuana, don’t expect them to fully understand how the drug works, both for you as an individual patient and in general as a therapy. Because no one really does.

With more and more states legalizing marijuana for medical or recreational use, cannabis is shedding its stigma and entering the mainstream. That means folks who’ve shied away from the stuff are getting better access, and exploring cannabis as a non-addictive treatment for ailments like pain. But that new interest is running smack dab into a big problem plaguing medical cannabis: The research on what marijuana can actually treat, what components of the plant matter, and how different patients respond to them, is severely lacking.

Just how much doctors are struggling with it becomes clear today in the Journal of Clinical Oncology. A study reveals that half of surveyed oncologists say they recommended marijuana to patients in the last year. But half of those didn’t think they actually had sufficient knowledge to make those recommendations.

The biggest question for oncologists is what cancer symptoms cannabis can really treat. The survey found respondents split when it comes to the treatment of pain: A third of oncologists said cannabis is equally or more effective than standard pain treatments, a third said it was less effective, and a third didn’t know. “But there seemed to be clear consensus that medical marijuana is a good adjunct to standard pain treatment, so a good add-on medication,” says Ilana Braun, lead author and chief of Dana-Farber Cancer Institute’s Division of Adult Psychosocial Oncology. In fact, two-thirds of respondents said it’d be a good supplemental treatment.

According to the National Academies of Sciences, Engineering, and Medicine—which last year published a massive, big-deal review of cannabis research—“there is substantial evidence that cannabis is an effective treatment for chronic pain in adults.” It’s also been shown to help control nausea and vomiting.

Now, doctors have long prescribed a synthetic THC called dronabinol, aka marinol, for the treatment of nausea and weight loss. Problem is, side effects include paranoia and “thinking abnormal.” Beyond that, you wouldn’t want to try to get high on it because it’s missing the galaxy of other active compounds in cannabis. “If it worked—it rarely does work—but if it really did work it would be abused on the streets,” says physician Allan Frankel, a pioneer in medical cannabis. “For 15 cents a pill? That’s how bad marinol is.”

The reason, Frankel says, is the so-called entourage effect, the interaction of dozens of other cannabinoids in marijuana like CBD (which is an extremely effective treatment for seizures, by the way) that may produce different therapeutic effects. So by that logic, with marinol, patients aren’t getting the full effect of the cannabis plant.

And that full effect would be? Well, nobody really knows—in part because the US government makes the stuff very, very difficult to study. In the eyes of the feds, it’s still a very illegal schedule I drug, the most tightly controlled category, and the DEA decides who gets crop to research. Researchers don’t have access to a variety of strains that might produce a variety of benefits, given different levels of CBD and THC and other compounds.

Even if you could study lots of different strains, it’s not always possible to tell what a patient is going to get at the dispensary. Flowers can be mislabeled, and the THC content of oils doesn’t always match what’s on the label. “Composition standardization is a giant mess,” says Jeff Raber, CEO of the Werc Shop, a lab that tests cannabis. “So for an ultra traditional doctor, I can understand where they’re like, Man, we don’t really know what that is, is that OK? It’s not standardized like a pharmaceutical product.”

A doctor can’t just say, Take two marijuana pills and call me in the morning. And on a physiological level, we all handle cannabis differently. “Even if I tell everybody, go inhale a tenth of a gram, their inhalation depths and absorption rates are going to be different,” says Raber.

“Unfortunately, we are going a little bit blind,” says physician Bonni Goldstein, medical director of the Canna-Centers, which provides cannabis consultations for patients. “But what I’m finding in clinical experience is I learn from every patient, and so we try to use the scientific research that we do have.”

So doctors like Goldstein try to tailor cannabis as best they can for a patient’s needs. Her patients have the luxury of attentive, personalized cannabis consultations. “Someone retired who has cancer who doesn’t have to get up in the morning and get somewhere may be able to take bigger doses during the day,” says Goldstein, “versus a mom of four who has kids in and out of activities, who has breast cancer.”

But your typical oncologist isn’t going to sit down with a patient for an hour to walk through their lifestyle and needs. So patients are left to experiment with dosages on their own, or consult with their local dispensary.

Because it turns out that dispensaries have some experience dosing cannabis. “Some of the top dispensaries that have been doing this for a while know this better than anybody else,” says Rob Adelson, president and CEO of Resolve, which makes a smart inhaler for medical marijuana patients. “There’s still so much about the pharmacokinetics of this plant that we just don’t know yet. So asking a doctor to come in to try to solve the problem without any more data than the dispensary has is hard.”

What Adelson sees cannabis promoting is a new paradigm of medical care. “We’ve heard this from many doctors, that they might not know about medical cannabis, might not want to promote it, and that a patient comes in and says, ‘I’d like to try it,’” he says. “And patients bring studies with them.” That inversion of responsibility has its downsides: An elderly patient might not be aware of side effects like dizziness, for example. But at the same time, it’s impossible to overdose. For better or worse, if doctors don’t feel they have the knowledge to appropriately prescribe a drug, patients will fill that void.

More cannabis science

Kilauea and the Implacable Power of Volcanic Lava

In 1935, lava from an eruption of the volcano Mauna Loa, on the Big Island of Hawai’i, started oozing toward the Wailuku River, main source of water for the city of Hilo. This danger to the more than 15,000 residents of Hilo was exactly the opportunity that Thomas Jaggar, founder of the Hawaiian Volcano Observatory, had been waiting for: to blow up a volcano.

This isn’t as crazy as it sounds. Actually, no, it was crazy. Jaggar thought, based on the state of the science, that explosives would collapse and plug the channels and underground tubes through which lava flows.

He approached the Army Air Corps, which had an airbase on the island of Oahu. There, a young lieutenant colonel named George Patton (yes, that Patton) planned a mission to deploy three Keystone B-3A bombers and two Keystone B-6As—biplanes!—to the slopes of Mauna Loa, where they’d drop 20 600-pound bombs on the lava. Five dropped onto red-hot flows, splashing lava 200 feet into the air upon detonation (which then punched holes through one of the bombers’ wings). Most of the other bombs hit the solidified sides of the flows. A US Geological Survey geologist on board one of the planes, Harold Stearns, reported that most of the bombs merely impacted on the surface.

So did it work? Well, the lava diverted and stopped flowing before it reached the river. It remains … controversial as to whether the bombs or the cessation of the eruption did it. (Jaggar thought the explosions released enough pressure to stop the lava; no one else does.)

Volcanoes have a lot of ways to kill people—caustic ash, superheated hurricane-like pyroclastic flows, incandescent mudslides called lahars…and, of course, lava. As the world watches the ongoing eruption of the volcano Kilauea, Mauna Loa’s neighbor to the east, you can see why Jaggar would resort to explosives, and why people have been trying to build lava barriers, unsuccessfully, since 1881. Lava’s appearance is rarely a surprise—but where it flows and how fast remain unpredictable. And it is, as researchers say, binary. Wherever it goes, it incinerates or buries everything in its path. There’s not much anyone can do about it except watch.

“A lot of cultures around the world have come to the conclusion that it’s a bad idea to live too close to a volcano,” says Natalia Deligne, a volcanic hazard and risk modeler at GNS Science, the New Zealand equivalent of the USGS. That’s why lots of volcanoes are magically inside national parks. “If you look at indigenous traditions, often the vent area is a taboo area,” Deligne says. “That’s just another form of land use planning.”

Unlike the ostentatious, once-in-a-blew-moon eruptors like the stratovolcanoes of the Cascades and the Andes, Hawaiian volcanoes are “shield volcanoes,” slow and steady pumps of relatively runny, low-silica lava. Volcanoes in general aren’t as murderous as other natural disasters—since 1900 volcanoes have killed about 280,000 humans, but in that same time earthquakes have killed more than 2 million. Lava comes in three types (highly viscous, deep “blocky” lava; chunky, fast-moving ‘a ‘a, and smooth pahoehoe), and it tends to move slow enough that it destroys property rather than kills people. So people continue to live on the slopes of the volcanoes. (Hawai’ian volcanoes also emit toxic, corrosive gas—sulfur dioxide turns into sulfuric acid on contact with the atmosphere, creating potentially deadly clouds called vog, short for “volcanic smog” [itself a contraction of “smoke” and “fog”].)

That’s what’s happening at Kilauea; lava is emerging from 14 fissures in the volcano’s East Rift Zone, amid a housing subdivision called Leilani Estates. More than 1,700 people had to evacuate, and about a dozen homes were consumed. This has been the situation, on and off, since the 1980s. “The lava would flow for a certain distance, then stop, and then rather than resuming travel in the same direction it would go back toward the vent and break out somewhere else,” says Michael Lindell, an emeritus environmental psychologist at Texas A&M who studies attitudes toward volcano risk. “Volcanologists don’t thoroughly understand the underground plumbing. They’ve got a pretty good idea, but they keep getting surprised.”

Even today, lava is unpredictable. Nobody really understands tube and channel formation or how a’a’ lava becomes pahoehoe and vice versa. Computers can forecast paths of flow from topography, but not speed or how wide the flow will be. (The USGS map of lava hazard zones on Hawai’i hasn’t been updated since 1992.) “How fast it’s coming out of the vents, how hot it is, how fast it’s cooling, how many crystals you have in the lava—those are all parameters that will dictate how the lava will flow,” Deligne says.

There’s not much to do about it when it does. Deligne says that hardly anyone actually zones construction or writes building codes with volcanoes in mind. And even if you did, what then? Ash, sure, just build your roofs with a pitch of greater than 35 degrees to shed the stuff. But lava? Maybe … round buildings? According to one of the few analyses of such things, a forensic look at a 2014 eruption of the Fogo volcano on Cape Verde, lava pushes them into compression, actually strengthening them; it tends to just push over flat walls.

Sometimes the volcano is quiet; sometimes it’s not. “Pele, the goddess of Hawaiian volcanoes, whose home is in Halema‘uma‘u Crater within Kilauea Caldera, is always described with two personas,” young and beautiful—and old and cruel, write James Kauahikaua and Robert Tilling, two past heads of the Hawaiian Volcano Observatory.

Now, the observatory is warning that things could get worse. A rapid lowering of the lava level in the Overlook crater at Kilauea’s summit was the first sign that lava was on the move. If that lava dips below the groundwater level, it could start making steam, converting this to an explosive eruption, scientists warned at a press conference. The Washington Post reports that a nearby geothermal power plant is moving 12,000 gallons of a flammable fuel called pentane to an industrial park that’s out of range, just to be safe.

But in the face of the threat, people’s attitudes toward volcanoes aren’t much different from how they feel about other hazards. Deligne loves volcanoes; she says she can’t imagine living anywhere there might be tornadoes. Lindell says if he had to live on the Big Island, he’d definitely try to stay on the north side—away from the volcanoes. As for the south side? “It’s incredibly cheap to live there and it’s a very pleasant life, so it’s an acceptable risk to them,” he says. “In some respects it’s no different than people living on the Hayward fault, or on the flood plain in Houston. They know the risk is getting worse, but they keep on rebuilding.”

More Eruptions

All You Need to Know About Google's New Products

Google showcased its plans for the next several months as it kicked off its annual developers’ conference Tuesday. Many of the new features center on the use of artificial intelligence to help save time.

Here are the highlights:

MAPS: Google will use augmented reality to help guide you to your destination. When you pull up direction on Google Maps, you can look through the camera and get turn-by-turn directions while viewing the actual street. The app will also orient you and verify your position using local landmarks such as buildings and shops viewed through the camera. Google calls the technology VPS, or visual positioning system. The feature is expected this summer.

GOOGLE DUPLEX: Google’s digital assistant will call actual people at businesses to make restaurant reservations and hair appointments and check holiday hours. In two demonstrations, a realistic-sounding automated voice used pauses and “ums” and “mmm-hmms” to sound more human during interactions with people. Google says the technology is rolling out as “an experiment” in coming weeks. Google says it’s still figuring out how to be upfront and let businesses know that they are talking to a computer.

GMAIL: An autocomplete feature called “smart compose” uses artificial intelligence to suggest ways to finish sentences you start typing. For example, “I haven’t seen you” might be autocompleted to “I haven’t seen you in a while and I hope you’re doing well.” The feature will start rolling out this month.

PHOTOS: When Google recognizes a photo of someone who is one of your contacts, it can suggest sending the photo to that person. It can also convert photos to PDFs and automatically add color to black-and-white photos or make part of a color photo black and white. The changes are coming in the next few months.

GOOGLE ASSISTANT: Google’s digital assistant will get six new voices, including one based on that of singer John Legend, later this year. The voices aim to sound more natural and will include pauses that convey meaning. Google is also unveiling ways to let you issue multiple commands without having to say “Hey Google” each time. And it will reward kids who say “please,” similar to a feature Amazon is bringing to its Alexa voice assistant.

LENS: Google’s visual assistant will be built into the camera. Just point the camera at a building or sign to get more information. Or copy text from images of menus, documents and other sources into another app on your phone. Samsung phones aren’t on the list of phones getting the feature starting next week. Samsung has its own version, Bixby Vision.

NEWS: Google is redesigning the News feature to present five stories you need to know, plus others that it thinks will be most relevant to you. For outlets with subscriptions, Google will allow you to subscribe directly through your Google account, without needing new passwords or credit card information. The feature should be available to everyone by next week.

ANDROID P: The version of Google’s Android phone software will infuse basic functions with AI smarts. The battery will adapt to how you use apps in order to conserve energy. “Adaptive brightness” will learn how bright you like your screen based on manual adjustments, instead of automatically adjusting based on the how bright it is. Apple’s latest system, iOS 11, has a similar feature. Owners of some Android phones -; none from Samsung -; can get an early test version now.

WELL-BEING: Android P also includes features to combat overuse. A “shush” mode automatically turns on the “Do Not Disturb” mode when you turn your phone face down on a table. And “Wind Down Mode” will fade the screen to greyscale at a designated bed time to help you disconnect before bed.

–The Associated Press

Nvidia Blinks, AMD Wins

(AMD vs. Nvidia from

On March 23rd, 2018, we published an article entitled, “Nvidia is Playing with Fire” in which we discussed Nvidia’s (NVDA) GeForce Partner Program (NASDAQ:GPP) and its implications on AMD’s (AMD) graphics cards business. Please read that story for background on the situation. On May 4th, 2018, Nvidia has announced that they are scrapping the GPP as a result of public pressure and controversy. In this quick follow up we’ll discuss the implications of this news on AMD and Nvidia.

Recap of the GPP

For more extensive background on the GPP introduced by Nvidia in March of this year and recently canceled please read our previous article entitled, “Nvidia is Playing with Fire.” We will recap the situation quickly here.

Both Nvidia and AMD produce graphics processing units (GPUs). Those GPU are then purchased by add-in board manufacturers (AIBs) such as Asus, Gygabite, MSI, etc. and are soldered into a PCB that provides power handling, display outputs, etc. Basically, when you buy an Nvidia GTX 1080 PCI Express graphics card the part that is made by Nvidia is just the GPU in the very center of the card. The rest of the components, such as the PCI slot shaped PCB, the heatsink, the fans, and of course, the obligatory RGB LEDs so coveted by gamers are manufactured by an AIB manufacturer.

As the gaming industry became more and more competitive AIB manufacturers have created valuable, gaming specific brands to sell their wares. For instance, Asus has their Republic of Gamers brand and Gigabyte has their Aorus brand. What Nvidia was looking to do with GPP was to obtain monopoly over those gaming brands. Per the GPP agreement AIB manufacturers would have to make their gaming brands exclusive to Nvidia if they wanted to be part of the program. To sell AMD based cards, these same manufacturers would have to create a separate graphics card brand. For instance, Asus added the Arez brand to market AMD graphics cards and removed all of the AMD offerings from their Republic of Gamers lineup.

Reaction to the GPP

Kyle Bennett from HardOCP got the ball rolling on criticizing Nvidia for this move. In his March 8th article he proclaimed this move to be anticompetitive and anti consumer choice soon thereafter have picked up the story and Nvidia has been widely criticized by journalists and gamers alike.

While smaller equipment manufacturers such as Asus and Gigabyte have signed up for the GPP relatively quickly there were several notable exceptions. Dell and HP, the two behemoths in the OEM world did not sign up for the GPP publicly they have not made any statements about the program to our knowledge. However, it is very likely that neither was very happy about this development.

Nvidia Blinks

In their blog post on May 4th, 2018, Nvidia had the following to say:

A lot has been said recently about our GeForce Partner Program. The rumors, conjecture and mistruths go far beyond its intent. Rather than battling misinformation, we have decided to cancel the program.

GPP had a simple goal – ensuring that gamers know what they are buying and can make a clear choice.

The GeForce Partnership Program had a short and eventful life but was quickly killed off due to public scrutiny and likely OEM pushback from large manufacturers. In their blog post, Nvidia tries to dismiss this issue by saying that their only intention was to make sure that gamers know the type of graphics card that they are buying. As we mentioned on our previous article, no gamer in the history of the world has ever purchased an AMD graphics card thinking it was Nvidia, or vice versa. While Nvidia can choose to deflect criticism by claiming that that was their intention the only way they could do so legitimately would be if they were to admit that they know next to nothing about their own target market.

AMD Wins

We believe this news is a big win for AMD. Now, to be clear we don’t think it is going to be a significant loss for Nvidia. After all, they are the big dog in this fight. They will move on and continue to sell a ton of their GPUs to gamers and cloud service providers alike. However, for AMD this means an even playing field, or at least a less tilted playing field. With their new partnership with Intel to provide Intel with AMD manufactured GPUs that can be integrated directly with Intel’s CPUs on a single socket we believe AMD has a bright future. For more on that story, please check out our article from April 20th titled, “AMD And Intel Had A Baby! And It’s A Beast!”

(Image of Intel CPU and Vega GPU attached to a single CPU socket board from Intel.)

Now AMD’s strategy has to concentrate on software. They need better software for artificial intelligence (AI) applications and a much harder push in that field. Hopefully they are paying attention and will be as proactive in that endeavor as they were in killing the GeForce Partner Program.

Investor Takeaway

With the hurdle of the GeForce Partner Program out of the way AMD should continue their growth in the PC gaming world. Rather than maintaining separate marketing brands most AIM manufacturers will soon go back to selling both AMD and Nvidia products under the same brand, and that’s going to be good for AMD, as they will regain the visibility they enjoyed before.

With the Intel partnership as a significant catalyst we see AMD’s software and individual game support improve significantly as they continue to infiltrate the general consumer market. This particular catalyst is going to take time to ramp up, but you don’t build an enduring advantage over a matter of months. It took Nvidia years investing into the AI and Gaming market to gain the dominance that they now enjoy, and it’s going to take AMD some time to start chipping away at that advantage. We should see progress in this regard by 2019.

In the mean time AMD will continue ramping up their enterprise CPU sales, which should be a great catalyst for the stock in 2018. On a whole we are still very optimistic about AMD’s prospects in 2018 and 2019, and continue to have a $20 price target.

Disclosure: I am/we are long AMD.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Uber to provide data support for NASA's urban air mobility program

(Reuters) – Uber Technologies Inc [UBER.UL] said on Tuesday it signed an agreement with U.S. space agency NASA to explore concepts and technologies needed for passenger and cargo air transportation within an urban area.

The Uber logo is displayed on a screen during the Women In The World Summit in New York City, U.S., April 12, 2018. REUTERS/Brendan McDermid

This is Uber’s second agreement with the space agency. As part of the pact, the ride-hailing company will share data related to its efforts to build flying taxis in 2020 for the development of NASA’s urban air mobility (UAM) program.

“Using data from Uber, NASA will use its research facility at the Dallas-Fort Worth (DFW) airport to simulate a small passenger carrying aircraft as it flies through DFW airspace during peak scheduled air traffic, and analyze if these operations would trigger traffic collision advisories,” Uber said in a statement.

Uber on Tuesday also released a new prototype for flying taxies at its annual Elevate Summit.

In November, the company said it was working with NASA to develop a software which could be used to manage flying taxi routes and would work like ride-hailing services that Uber has popularized on the ground.

Reporting by Munsif Vengattil in Bengaluru; Editing by Arun Koyyur

Egypt passes law regulating Uber, Careem ride-sharing services

CAIRO (Reuters) – Egypt’s parliament passed a law on Monday regulating ride-sharing apps Uber and Careem, potentially ending a lawsuit that could shut them down in one of their biggest markets but imposing new fees and data sharing requirements.

FILE PHOTO: Employees work inside Uber’s Centre of Excellence office in Cairo, Egypt October 10, 2017. REUTERS/Amr Abdallah Dalsh/File Photo

Legalising the increasingly popular ride-sharing services became urgent in March when an Egyptian court ordered their suspension after a group of taxi drivers filed a suit, arguing they were illegally using private cars as taxis.

Another court last month stayed that ruling, allowing U.S.-based Uber and its Dubai-based competitor Careem to continue operating while the case is appealed. A higher court is expected to hear the appeal later this week.

Uber has faced regulatory and legal setbacks around the world amid opposition from traditional taxi services. It has been forced to quit several countries, such as Denmark and Hungary.

Uber has said Egypt is its largest market in the Middle East, with 157,000 drivers in 2017 and 4 million users since its launch there in 2014.

The new law stipulates that ride-sharing companies obtain five-year renewable licences for a fee of 30 million Egyptian pounds ($1.71 million) and that drivers pay annual fees to obtain special licences to work with the company.

“This is a major step forward for the ride-sharing industry as Egypt becomes one of the first countries in the Middle East to pass progressive regulations,” Uber said in a statement.

“We will continue working with the prime minister and the cabinet in the coming months as the law is finalised, and look forward to continuing to serve the millions of Egyptian riders and drivers that rely on Uber.”

The law also requires the companies to retain user data for 180 days and share it with authorities “on request” and “according to the law,” according to a copy of the law reviewed by Reuters.

An earlier draft of the bill had called for real-time data sharing by the companies, but that prompted some opposition in parliament due to privacy concerns.

The law must now be ratified by President Abdel Fattah al-Sisi.

Uber said last year it was committed to Egypt despite challenges presented by sweeping economic reforms and record inflation. In October, Uber announced a $20 million investment in its new support center in Cairo.

It has had to make deals with local car dealerships to provide its drivers with affordable vehicles and adjust its ride prices to ensure its workers were not hit too hard by inflation.

($1 = 17.5900 Egyptian pounds)

Reporting by Nashaat Hamdi, Mahmoud Mourad, and Eric Knecht; Editing by Mark Potter

Uber hires former NTSB chair to advise on safety culture after fatal crash

(Reuters) – Uber Technologies Inc [UBER.UL] said Monday it has hired a former National Transportation Safety Board (NTSB) chairman to advise the company on its safety culture after a fatal self-driving crash in Arizona.

The Uber logo is displayed on a screen during the Women In The World Summit in New York City, U.S., April 12, 2018. REUTERS/Brendan McDermid

Online news outlet The Information reported Monday that Uber has determined the likely cause of the fatal collision was a problem with the software that decides how the car should react to objects it detects. The outlet said the car’s sensors detected the pedestrian but the software decided it did not need to react right away.

“We have initiated a top-to-bottom safety review of our self-driving vehicles program, and we have brought on former NTSB Chair Christopher Hart to advise us on our overall safety culture,” Uber said Monday. “Our review is looking at everything from the safety of our system to our training processes for vehicle operators, and we hope to have more to say soon.”

A 49-year-old woman was killed on March 18 after being hit by an Uber self-driving sports utility vehicle while walking across a street in Phoenix, leading the company to suspend testing of autonomous vehicles. Arizona’s governor also ordered a halt to Uber’s testing.

Uber declined to comment on the Information report. “We can’t comment on the specifics of the incident,” the company said, citing the ongoing NTSB investigation.

The National Highway Traffic Safety Administration is also investigating the incident.

Uber Chief Executive Dara Khosrowshahi said in April the ride-sharing company still believes in the prospects for autonomous transport. “Autonomous (vehicles) at maturity will be safer,” he said at a Washington event.

Reporting by David Shepardson; editing by Jonathan Oatis