World Tech Today

Latest News and Breaking Stories

Super Micro Computer: Is It Time to Hedge Your Bets?

by Leave a Comment

Super Micro Computer (SMCI), a leading provider of high-performance server and storage solutions, has seen its stock price plummet by over 70% from its peak in March. This dramatic downturn has left many investors wondering if it’s time to consider options as a hedge against further losses.

Who is Super Micro Computer?

Founded in 1993, Super Micro Computer has grown into a major player in the enterprise server market. The company designs and manufactures a wide range of servers and storage systems optimized for various applications, including cloud computing, artificial intelligence, and 5G.

 Why the decline?

Several factors have contributed to the recent decline in SMCI’s stock price. Firstly, the overall market sentiment has shifted away from growth stocks, impacting the entire technology sector.

Secondly, concerns have been raised about the company’s accounting practices and corporate governance. Lastly, increased competition from larger players like Dell and HP has put pressure on Super Micro’s margins.   

What are the options?

In this volatile situation, investors might consider using options to hedge their positions in SMCI. Options contracts provide the right, but not the obligation, to buy or sell a stock at a predetermined price (strike price) before a specific date (expiration date).   

  • Protective Puts: Buying put options can act as an insurance policy. If the stock price continues to fall, the put option will increase in value, offsetting some of the losses in the stock.   
  • Covered Calls: If an investor believes the stock might recover but wants to limit potential losses, they can sell covered call options. This strategy generates income (premiums) but caps the potential upside if the stock price rises significantly.   

What’s my take?

I’ve been following Super Micro Computer for several years now, and this recent volatility is certainly concerning. While the company’s fundamentals appear strong, the lingering uncertainty surrounding its accounting practices and the competitive landscape makes me cautious. Personally, I’m considering buying put options as a hedge against further downside risk. However, it’s crucial to remember that options trading involves significant risk and is not suitable for all investors.   

What should you do?

Before making any investment decisions, it’s essential to conduct thorough research and consult with a financial advisor. Carefully consider your risk tolerance and investment objectives.   

Key takeaways:

  • Super Micro Computer’s stock has experienced a significant decline due to market sentiment, accounting concerns, and competition.   
  • Options can be used to hedge against further losses or generate income in a volatile market.   
  • Protective puts offer downside protection, while covered calls limit potential upside but generate income.   
  • Investing in options involves risks and requires careful consideration.   

Why Is It Important to Invest in The Stock Market?

by Leave a Comment

Your investment portfolio may benefit from holding stocks. Investing in various companies can help you save money, keep it safe from inflation and taxes, and increase the amount of money you make. Investment in the stock market carries risks, as any financial decision holds a degree of uncertainty. Understanding the risk/return connection and your risk tolerance is essential when investing.

stock markets

Benefits of Stock Investing

  1. Benefits from a Thriving Economy

As the economy grows, business earnings climb as well. Economic expansion generates jobs, which in turn generates money, which in turn creates revenue. A higher-income increases consumer demand, which drives more revenue into the cash registers of companies. Expansion, peak, contraction, and trough are all business cycle phases that can be better understood with this information.

  1. Best Approach to Beat Inflation

Stocks have previously returned an average of 10% annually. Better than the average yearly inflation rate, in other words. It does, however, necessitate a longer time frame of reference. You’ll be able to buy and hold even if the price falls for a short time.

  1. Easy to Buy

Investing in stocks is simple, thanks to the stock market. One should search for the cheapest stock brokers and online retailers for buying stocks. Stock purchases can be completed in a matter of minutes after you’ve created an account.

  1. Make Money in Two Ways

For the most part, investors want to profit by purchasing low and then selling at a higher price. They put their money into firms with high growth potential that will eventually pay off. Day traders and long-term investors alike will find this appealing. Some are interested in short-term gains and those hoping for long-term growth in the company’s profits and stock price. They both feel they can beat the market with their stock-picking abilities. Some investors, on the other hand, would rather have a steady flow of funds. They invest in dividend-paying firms’ stock. Those businesses are expanding at a constant but moderate rate.

  1. Easy to Sell

It’s simple to sell your shares because you can do it at any time on the stock market. Liquidity is a phrase economists use to describe how easily shares can be converted into cash at a cheap cost. This is critical if you find yourself in a situation where you suddenly require money. You may be compelled to take a loss since prices are so volatile.

Drawbacks of Stock Investing

  1. Risk

There’s a chance you’ll lose all you put into it. Investors will dump a company’s shares if it performs poorly, causing the stock price to collapse. If you sell, you’ll be out the money you put into it. Bonds are a good investment if you can’t risk losing your initial capital. If you suffer a stock loss, you’ll receive tax relief. If you earn money, you must also pay capital gains taxes.

  1. Stockholders Paid Last

If a firm goes bankrupt, preferred investors, bondholders, and other creditors will be paid first. However, this only occurs in the event of a corporation going bankrupt. Even if one of your investment holdings goes bankrupt, you should be protected by a well-diversified portfolio.

  1. Time

To assess how successful a firm will be before purchasing its stock, do your homework before purchasing if you’re doing it on your own. You’ll need to become proficient at reading financial statements and quarterly reports, as well as keeping up with corporate news. If the stock market has a correction, a crash, or a bear market, even the best-performing companies will see their prices plummet.

  1. Emotional Tendencies

Stock prices are like riding a roller coaster, rising and falling every second. People are prone to buying high and selling low due to greed and fear, respectively. Rather than constantly monitoring stock price changes, investors can instead check in regularly.

  1. Competition

Investors with greater time and expertise can invest more money, such as pension funds and hedge funds. Their trading techniques, financial projections, and computer systems are likewise quite advanced. Learn how to get a leg up on the market as a private investor.

Diversify to Reduce the Investment Risk

You can lessen your investment risk by diversifying, for example:

  1. By Investment Type

Most of the advantages and fewer downsides of stock ownership are provided by a well-diversified portfolio. In other words, it means a combination of stocks, securities, and commodities. It’s the finest long-term strategy for maximizing returns with the least amount of risk.

  1. By Company Size

Corporations are classified as large, midsize, or small based on their market cap. “Capitalization” is what the word “cap” means. The sum of the stock price and the number of shares outstanding equals the dividend yield. Owning a diverse portfolio of businesses of varying sizes is advantageous since they perform differently at different business cycle stages.

  1. By Location

Own businesses in the U.S., Europe, Japan, and emerging regions around the world. To take advantage of growth, you must diversify your investments to avoid exposing yourself to any stock downturn.

  1. Through Mutual Funds

Owning mutual funds gives you access to a manager’s selection of hundreds of stocks. Index funds and index ETFs are simple approaches to diversify your portfolio.

Why should you invest now?

However, for most people, the potential growth surpasses the danger. So, investing in equities is nearly always a wise choice, even when the market is booming. Studies demonstrate that staying in the market is more crucial than timing it. Waiting for the correct timing to buy stocks might be costly because gains are concentrated in a few days.

On the other hand, stocks tend to bounce back from 10% drops in a few months. So, the longer an investor remains in the market, the less likely they are to lose.

Buying the appropriate stocks is as crucial as timing the market. A few equities account for most of the market’s returns. That’s why it’s preferable to buy stock in a fantastic firm now than to wait for a reasonable price.

Whole Foods is making changes as same-store sales fall

by Leave a Comment

Whole Foods Market announced on Wednesday the struggling grocery chain saw a decline in same-store sales for the previous year, the first time since 2009, and the company is making some changes to stop the slide, according to The Wall Street Journal.

And the changes are beginning at the top.  Co-founder John Mackey announced the company is eliminating the dual CEO structure, and his co-CEO, Walter Robb, will step down from the position at the end of the year.  Robb will remain on the board of directors and will also function as a senior adviser.

The move comes as Whole Foods Market is facing stiff competition from other grocery chains and online ordering services, coupled with a less than enthusiastic customer demand.  The company has in recent years cut its prices and started a loyalty program, similar to mainstream supermarkets, as the retailer seeks to change the perception that they are an overpriced chain.

Additional competition comes from more traditional markets who have begun to offer items such as organic and fresh local foods.  Mackey said in the announcement, “Competition is everywhere; everybody’s feeling it.”

The firm’s same-store sales dropped 2.5% in fiscal 2016, slightly more that the 2% the company had predicted, marking only the second time ever for such an event.  Same-store sales dropped 3.1% in fiscal 2009.

The company said it expects its cost-cutting and streamlining measures to begin to be realized next year, predicting total revenue to rise by 2.5-4.5%, despite sales remaining flat or possibly falling by 2%.

Admitting they have a lot to learn, the company’s executives say they hope the new spin-off, 365 by Whole Foods Market, will strike a chord with younger Americans willing to purchase store branded foods, without the frills and luxuries of a traditional Whole Foods store.

The company also announced their Chief Financial Officer, Glenda Flanagan, would retire at the end of fiscal 2017, after 29 year of service, but will continue as a senior adviser, and also Mary Ellen Coe, vice-president of sales and product operations at Google, has joined the company’s board.

Vail Resorts adds Whistler Blackcomb to massive portfolio

by Leave a Comment

Whistler Blackcomb, one of the most iconic ski areas in the world, is being acquired by Vail Resorts in a deal worth $1.05 billion. The deal was announced Aug. 8 in a Vail Resorts press release. Whistler Blackcomb becomes only the latest addition to Vail’s massive portfolio.

Whistler Blackcomb is about 75 miles from Vancouver, B.C. It draws over 2 million people every year. Although business has increased steadily at the British Columbia resort, management of the 8,100-acre ski area have expressed concern about the effect of climate change, which has caused delayed season openings or early season closings due to lack of snow.

Dave Brownlie, chief executive officer at Whistler Blackcomb, said that the B.C. resort could expand its ski terrain by about 25 percent. Vail said it plans to “invest substantially” in the infrastructure of its latest addition, and continue to expand the resort’s four-season activities.

Brownlie said, “As the number one ranked and most visited resort in North America, Whistler Blackcomb has enjoyed tremendous success by delivering an exceptional mountain experience for our passionate and loyal guests — both locally and from around the world. That’s going to continue as we work with our new colleagues at Vail Resorts as well as our employees, local businesses, community and government stakeholders to make Whistler Blackcomb better than ever.”

Vail plans to keep local leadership at Whistler Blackcomb, and retain most of the staff. Brownlie will continue as the CEO, and will become a senior leadership team member for the Vail Resorts’ mountain division.

Vail Resorts will continue ongoing negotiations that are being held with First Nations groups regarding master development plans.

The Epic ski pass, which presently covers 11 ski areas worldwide, will be extended to Whistler Blackcomb.

Struggling to pay your bills? New fed survey says you aren’t alone

by Leave a Comment

WASHINGTON-According to the latest survey by the Federal Reserve Bank, that looked at the financial well-being of American citizens, 31 percent of us, around 76 million people say they are having trouble making ends meet and are barely getting by.

The bad part is that is actually good news.  The results from the previous study two years ago recorded 38 percent of Americans were not in good financial health, so the number is dropping, according to an article on CNN.

The story continues to point out that is why the nation’s economy is such a big factor in the upcoming presidential election.  Millions of Americans have not been able to right the ship since the end of the Great Recession.

Speaking of the survey results, Federal Reserve Board Governor Lael Brainard said, “It’s important to identify the reasons why so many families face continued financial struggles and to find ways to help them overcome them.”

Also noted in the survey was the question would you be able to cover an unexpected $400 bill if it came up, and 46 percent of respondents said they could not and would need to sell something or borrow the money to cover the bill.

And it wasn’t just the lower economic classes with the problem, as 38 percent of middle class Americans also said they would have trouble covering the emergency expenditure.  Somewhat surprisingly, even 19 percent of those making over $100,000 per year admitted they would also not be able to meet the expense easily.

According to the survey, almost half of all Americans spend less than they make, and the percentage of those saving money is 9 points higher than the previous survey.  But, almost one-third of non-retired adults reported they do not have any retirement savings put back, including 27 percent who are age 60 and older.  That is the likely reason 42 percent of them say they will work until they reach 70, or never plan to retire.

More adults in the latest survey said they were living comfortably or doing all right than in the earlier survey, and slightly over half said they felt the value of their homes had increased over the past year, a good sign.

The Federal Reserve report can be found here.

Researchers disappointed with new GMO finding

by Leave a Comment

Genetically-modified crops (GMOs) were touted as being the deliverance for the food security of the world by being engineered to resist insects and herbicides, but new research from the National Academies of Science, Engineering and Medicine is showing the process is not measuring up, at least so far.

The good news from the research is that the agency found no issues with the consumption of GMOs in human diets, and the engineered versions of the crops appear to be as safe as the conventionally bred crops.  The report looked at the rates of various diseases before and after the introduction of GMOs in commercial farming in the 1990s.

One of the primary uses for genetically engineered crops was to increase yield by making them resistant to insect damage and toxic weedkillers.  For quite some time, scientists have hoped to develop these type crops to make food sources more plentiful and boost profits for farmers, with the goal to make the business more profitable and entice more to participate.  Also, it was planned to make the world’s food supply more secure by creating surplus.

Some 12 percent of the world’s cropland is currently being used for growing genetically engineered crops, primarily soybean, cotton and corn.  The study found, that while less insecticide is being used, there was little evidence that the GMO crops have increased yields in the United States any more the the conventional crops were improving already.

Still, more research on the matter will be forthcoming, not only in the fields of increased production, but food safety as well.  The report stated, “All technologies for improving plant genetics — whether genetic engineering or conventional — can change foods in ways that could raise safety issues.  Therefore, it is the product that should be regulated, not the process.”

Some US states have already enacted legislation to force food suppliers to label their products with GMO labels, but with the new evidence, it is unclear if consumers will heed the labeling or even if it should.

Intel to lay off 12,000 employees as it struggles to adapt to post-PC world

by Leave a Comment

A giant in the PC era, making processors that powered both Windows-based personal computers and Macintosh machines, Intel made a serious strategic error – they turned down the opportunity to provide iPhone processors, believing it to be a flash-in-the-pan gadget. Now the PC era is ending, and as Intel struggles to adapt to the post-PC world the company has announced that by the middle of 2017 they will be laying off 12,000 employees, 11 percent of its workforce.

Intel actually had two opportunities to become a major player in the mobile chip market. The first was the Apple iPhone business. The second was its ownership of a mobile chipmaker, XScale, which it sold for $600 million in 2006.

The issue with chips for mobile devices is that they need to be less power hungry than the Intel chips used in desktop computers, which are plugged in. Mobile devices are all about battery life, and users are willing to compromise a bit on performance to increase life. Intel’s existing x86 chip standard that had been used since the IBM PC in 1981 was unsuited to this demand.

Mobile device companies looked to a standard called ARM, which was designed for long-life, low-power mobile use. In addition to consuming less power, ARM is designed for customization, and licenses its design to companies such as Samsung, which makes the actual chips. This allows smartphone makers to combine many different functions on one chip, which helps keep power consumption down.

These ARM chips dominate today’s mobile phone devices, and iPads and iPhones run on A9 chips that are based on the ARM platform. Android-based phones also run on ARM-based chips.

When Intel sold XScale they believed that it would show commitment to their development of a lower-power version of the x86 chip called Atom. Although Intel has made progress improving the Atom chip, ARM chips have too big a share of the market for catch-up to be realistic.

Intel will use a combination of “voluntary and involuntary departures” for its massive layoffs, and plans to consolidate its offices that are now worldwide, with facilities in California, Oregon and Arizona, and international facilities in Ireland, China, Israel and Mexico. They have not yet announced where most of the job cuts will take place.

Even though Intel just announced a $2 billion profit for the first quarter of 2016, growth has stalled, leaving Wall Street worried about its future, as that figure fell short of Wall Street forecasts.

In a statement, Intel CEO Brian Krzanich said, “We are evolving from a PC company to one that powers the cloud and billions of smart, connected computing devices.” However, Intel still relies on PC sales for about two-thirds of its revenue.

Cheerios deletes Prince tribute tweet after public backlash

by Leave a Comment

Cheerios has deleted a tweet that said #prince, “Rest in peace” after public backlash called it offensive and opportunistic. The problem? The dot above the “i” was a Cheerio.

The General Mills-owned company released a statement after deleting the tweet, saying they were simply seeking to acknowledge the death of a legend who came from their own Minnesota hometown. “But we quickly decided that we didn’t want the tweet to be misinterpreted, and removed it out of respect for Prince and those mourning,” said Cheerios.

Twitterfeeds blew up in response to Cheerios’ posting. “Hey guys, Prince died. BUT PLEASE DON’T FORGET ABOUT CHEERIOS!” and, “Can’t believe that Cheerios Prince ad. Incredibly poor taste to use his death for self promotion,” and, “Mysteriously, somehow, my love of Prince and my sadness at his passing have transferred into a love and desire for cheerios.”

Although other companies took to Twitter to post tributes to Prince, Cheerios received by far the most attention. For example Spotify tweeted “We join the world in mourning the loss of a genius, a legend, and an inspiration to generations of artists and fans.” NASA posted a picture of a purple nebula, tweeting, “A purple nebula, in honor of Prince, who passed away today.” Chevrolet’s tweet said, “Baby, that was much too fast. 1958-2016.” Apparently the problem with Cheerios’ tweet was, well, the Cheerio.

The 57-year-old Prince died last Thursday at his Chanhassen, Minn. home.

Internet TV: Can Netflix hold off the competition?

by Leave a Comment

Netflix is by far the biggest player in the internet streaming video game, but there are rumblings that serious challenges may be coming down the road for the company, and Amazon may have just fired the first shot.

Amazon announced its Prime Video streaming service will become a standalone offering and will be in direct competition with Netflix, but there other companies with deep  pockets that may be planning to jump on the train also.

Companies like Apple, Google and Facebook are all looking at some form of internet video streaming and, while their business models may not be exactly like Netflix and Amazon, they certainly can take a share of the streaming pie away from one of the more established companies.

Those companies are not exactly sneaking up on Netflix, however, as CEO Reed Hastings recently said in an article on Fortune, “There are so many competitors, and everyone is working hard to build the best content. We are seeing growth in the overall Internet TV market that is displacing linear TV, so it’s natural that everybody is coming in as they realize that the future is Internet TV.”

But Netflix isn’t just resting on its laurels.  The company announced it had expanded its services to over 130 countries and added 6.7 million new subscribers to its base in just the first quarter of this year.  The company reported that 2.2 million of the new members were from the US as well.

The recently announced price increase to its “grandfathered” subscribers, who had been paying a lower rate if they already had the service prior to the increases in 2014, is expected to slow growth for the second quarter, but the company is investing heavily in new and original programming, with intentions of remaining the top service.

Competitors like Apple and Google may go the route of making a large acquisition instead of buying video content like the Netflix model, for instance, companies like Paramount studios, which reportedly is on the market, or a distribution business like Starz.

At the end of the day, it remains to be seen which type of service will win out, but one thing is certain, the way we watch TV is changing, and the successful company will be the one that anticipates what the public wants to see, and how they want it delivered.

Here’s why prescription drug costs are climbing higher

by Leave a Comment

A new report by IMS Health. a global information and technology services company, is saying that the amount of money spent on prescription drugs in the United States in 2015 rose 8.5%, with recent price hikes and the introduction of some very expensive new medicines as the leading causes, according to the LA Times.

The report estimates that a combined $309.5 billion was spent by patients, insurers, government programs and other payers, and the IMS Institute for Healthcare Informatics predicts the number will rise to between $370 and $400 billion by the year 2020.

Skyrocketing drug prices have been hitting the headlines in the past several months, and that has led to calls by elected officials and presidential candidates to slow down the escalating costs.  Insurance companies are trying to pressure drug manufacturers to offer greater discounts and lower prices, but with little competition in the markets, not much relief has been noted.

But rising drug prices is not the only factor in the increased amount of spending on medications in the US.  Since the inception of the Affordable Care Act, an additional 20 million people now have health insurance, and many are being prescribed medications for conditions that had been undetected, since many of those people were not seeing a physician, because they could not afford it.

Murray Aitken, the institute’s executive director, said the uptake in spending is probably partially attributed to more brand-name drugs being purchased by the newly insured as well, but added those new patients are mostly getting the lower-cost generic versions of their medications.

Still, one of the major factors for the increase is the introduction of new medications for diseases like cancer and hepatitis C, among others, that often cost over $100,000 for a year’s worth of treatment.  Coupled with drug companies raising the price of older drugs one or more times per year, the increased spending adds up rather quickly.

Reports of companies buying the rights for older medications and quickly jacking the prices up several times over the previous cost are adding to the perception that “big pharma” is to blame for most of the cost.  But, for the year 2015, 43 brand new drugs were introduced, along with an additional 30 that were re-formulated, and many of those come with hefty price tags due to companies trying to recoup their research and development costs.

The good news is that the 8.5% increase in 2015 was smaller than the 10.5% rise in 2014, and the institute predicts the rate of increase to continue to slow, rising four to seven percent over the next few years.

Facebook Auto Publish Powered By : XYZScripts.com
Web Analytics