Cloud Hosting is The Architecture of Cloud Computing Techniques

Cloud Hosting Technique

Cloud Hosting is The Architecture of Cloud Computing Techniques

Cloud Hosting is The Architecture of Cloud Computing Techniques

provides the hosting services in the form of a single virtual machine and is implemented through the use of cloud computing and cloud architecture. It dynamically distributes data and processes across the small servers of the system for processing. The cloud hosting system is divided into many virtual machines. The services offered by a loud hosting service provider are located at its premises and these can be accessed by using client software.

The cloud hosting allows the users to get their applications up and running much faster and enables the quick readjustment of virtual resources to meet the dynamic demands like increased data rate, traffic size and storage requirements. The users can assess the cloud using different client devices like desktops, laptops, tablets and phones. Some of the user devices require real time cloud computing for running their applications, while others can interact with a cloud application via web browsers. Some cloud applications only support specific client software dedicated for these applications. Some legacy applications are also supported through screen sharing technology. The internet giants such as Google and Amazon are using this state of art hosting technology successfully for their servers.

Cloud hosting can be offered in three different modes i.e. infrastructure as a service(IaaS) , platform as a service(PaaS) and software as a service(SaaS). The basic mode IaaS , offers the services in the form of physical or virtual machines ( computers & other processing devices), raw/block storage , firewalls , load balancing mechanism and networks .The IaaS mode services provider supply these resources from a large deployed pool of resources in data centers andthis also include provisioning of local area networks and  IP addresses. The PaaS mode cloud hosting services provider offers a cloud computing platform  that include an operating system, programming execution environment, database and server. The PaaS application software can be developed and run on a cloud platform and does not involve cost and complexity of buying and managing the hardware and software layers. The (SaaS) mode cloud hosting services provider  install and operate application software in the cloud and cloud users access the software from cloud clients and the cloud platform in this case is not managed by the clients. Clouds hosting can be physically deployed in the form of public cloud, personal cloud, hybrid cloud and community cloud.

Cloud hosting has greatly reduced the website operational cost. In older versions of servers, the clients used to pay for a specific bandwidth irrespective of the traffic on that server. The cloud hosting has tackled this problem through the skillful use of variable costing method, where the cost will increase with the traffic and as the load/traffic reduces the cost will be automatically decreases.

The cloud hosting has a great advantage in terms of its security, as it operates in isolated environment and only the host has the access to it. One of the biggest advantages of cloud hosting is that the cloud platform manageability, maintenance and upgrades can be easily and remotely accomplished, as it does not require any physical/hardware maintenance repair and replacement.

Boeing 787: A Complex Puzzle

The Boeing (BA) 787 program is likely one of the most watched commercial aircraft programs from a cost perspective for Boeing. During 2017, the program saw some key events with the first flight of the Boeing 787-10, the biggest variant of the Dreamliner program, orders from key customers and a long awaited extension of the accounting block.

Changes to the accounting block were made in the 3rd quarter of 2017. Over the past few quarters, AeroAnalysis has contacted Boeing several times to exchange thoughts and views and that has allowed us to quite accurately model the deferred balance development. In the 3rd quarter of 2017, Boeing extended the accounting block by 100 aircraft. A block extension was what we have been expecting for a while, but we expected Boeing to announce an extension of 200 units instead of the 100 units.

In order to accurately model the impact of the change, we reached out to Boeing to ask what the deferred balance would have looked like without the impact of the block extension. This is a figure that it did share during a previous earnings call when it reclassified part of the cost balance to R&D costs. This time, Boeing has been unwilling to shine some more light on this except for mentioning that the block extension is accretive to the program margin.

Boeing gave no information that AeroAnalysis wasn’t familiar with already, and that’s unfortunate, especially since the articles we publish on Seeking Alpha on the deferred balance subject are important for Boeing investors, are somewhat unique, and have a very appreciable accuracy.

Source: The Boeing Company

In this report, we will have a look at what our expectations are for the performance in the 1st quarter and the delivery balance at the 1,400th delivery. We think it is very useful to do so, as it gives an idea of Boeing’s ability to generate certain profits on production, the ramp-up pattern of those profits and whether there is a need for charges in the future based on current expectations. This report is in addition to the report that we already wrote on the our expectations for the first quarter based on past performance. While this report does also include a projection for the first quarter, the calculation method is significantly different.

Additionally, this is one of the few moments where you get a ‘peek in the kitchen’. Once the balance is zeroed out, it is unlikely that Boeing will quantify anything on the Dreamliner program other than backlog, deliveries and production, and you will have no clue about cash generation on the program.

Understanding and gaining understanding of program accounting and the development of the deferred balance is very important. An example demonstrating this: At the start of 2016, Boeing shares sank on the announcement of an SEC probe that would focus on the program accounting method on the Boeing 747 and Boeing 787 programs. Although this potentially could harm Boeing, we viewed the drop in share prices overdone, and it likely was the result of investors being unfamiliar with program accounting and alternatives to recognizing charges. Any investor who bought on ‘the dip’, which was almost a no-brainer, has seen their investment pay off pretty well with a >200% return. Aerospace isn’t ‘sexy’ to invest in compared to tech and certain other areas and might not be as rewarding as biotech, but if you know what you are investing in and are able to put certain subjects in a bigger context, then it can be very rewarding.

Since not all of my readers are familiar with the program accounting method and program accounting on the Dreamliner program, we have provided a brief overview below.

Program accounting

https://steemit-production-imageproxy-upload.s3.amazonaws.com/DQmYmacQeM4U5HdjMr4cnX9GDkRa31c8d7NmWfjoKzZh3RM

Source: Steemit

Boeing uses program accounting for its aircraft programs instead of unit-cost accounting. To understand what the deferred costs are, it is important to know how program accounting works. On programs where initial production costs are high, such as aircraft programs, it does make sense to amortize costs over a wider number of productions than just on the few initial productions. In other words, costs are spread out over an accounting block, and it is not only the costs that are spread out. Boeing makes assumptions on the revenues as well. For the Boeing 787 program, the accounting block currently stands at 1,400 units, up from 1,300 and 1,100 units previously.

Boeing says that the units in the accounting block are units of which it can credibly estimate costs and revenues but should not be considered an indication for a break-even point. Unless Boeing has set an average program margin of 0%, which it has not, a zero deferred balance is no indication of a break-even point. Analysts pay close attention to the deferred balance and so should investors. The reason is that it is likely Boeing needs to recognize a charge if it has not zeroed out the deferred costs by the 1,400th delivery (the number of units in the accounting quantity).

Simultaneously, one should be aware of the fact that if Boeing zeroes out its deferred balance by the 1,400th delivery, it will actually have made the profits that it estimated for the accounting block and that the profits it has been reporting for the program were valid after all. So, the 1,400-unit accounting block is far from a break-even point. Even if Boeing does not zero out the balance by the last delivery and has to recognize a charge it can still have booked a profit if the recognized charge is lower than the realized program profit.

The assumption for costs and revenues means that Boeing assumes an average profit figure for each of the aircraft it currently delivers. If the actual profit figure is lower than the assumed profit, the deferred balance rises. If the profit is higher than the assumed profit, the deferred balance declines. So, the deferred balance tells you how profitable or unprofitable the program has been to date versus the assumed program profits.

Change to the model

The total balance that Boeing needs to recoup on the Boeing 787 program consists of 2 sub-balances. The first one being the deferred production balance and the second one being unamortized tooling costs and other non-recurring costs. In previous modeling attempts we always considered the deferred production balance only, assuming that Boeing would first build off the deferred balance and after that start reducing the unamortized tooling costs. This assumption was nothing more than an assumption to simplify the calculation process. We now have lumped both balances, since it is more important to be able to assess the overall improvement rather than being able to attribute performance to either of the balances. Additionally, the ramp up pattern has been flattened somewhat since we previously overstated the improvement by $153 million to $367 million. This is just 1.5% of the deferred production balance, but given that in absolute figures we are talking about several millions per airframe and the fact that the model used to estimate the balance within a 1% margin and often within a .5% margin we deem a 1.5% deviation to be too high and it could even make the difference between having to recognize charges and extending the accounting block or not.

A change that is not yet implemented in the automated calculation model is an additional margin improvement as Boeing saves money on titanium and steps up its production in 2019. A column has been manually added to highlight expected savings.

First quarter estimate and full block estimate

For the first quarter a decrease of roughly $1B is expected according to our modeling. There are a few things important to observe. The first thing being that just like in previous modeling attempts, the deferred production balance can possibly be zeroed out within 1,400 deliveries. The model suggest that roughly $600 million would remain uncovered from the deferred production balance with the remainder coming from the unamortized tooling costs and other non-recurring items. That is something that hasn’t changed much, since we have always pointed the latter balance to be making the process of zeroing out the costs within the accounting quantity more challenging.

The combined balance is expected to remain at $3.76B at the 1,400th delivery. As pointed out before, Boeing has some cost initiatives running that would further reduce costs but these have not been fully modeled. We expect further savings coming from additive manufacturing as well as a rate increase in 2019. Assuming that these are all additional savings on top of a more favorable delivery mix and maturing profits, Boeing could zero out the complete balance as the additional savings could potentially fully offset the remaining balance.

In case, no additional savings are to be realized, then Boeing would most certainly need another block extension.

Gliders

Illustration of Gulf Air Boeing 787-9

Source: ch-aviation

Due to in-service issues with the Rolls Royce Trent 1000 Package C, deliveries of RR powered Boeing 787s are running late on top of existing delays as Leeham News and Comment reported. This will likely cause a build up in inventory, which might affect the burn off of the total deferred balance.

Conclusion

In this report we have lumped the deferred production balance and unamortized tooling costs. As a result, the expected balance after all units within the accounting quantity has seemingly increased to $3.76B up from a figure close to zero. This is mainly caused because we have now included the unamortized tooling costs in the total balance, whereas we previously only mentioned it at the end of the article.

Quite important to note is that at the 1,400th delivery we do not expect Boeing to have completely zeroed the balance unless additional savings as previously outlined indeed do materialize. In absence of these savings, another block extension will be required.

For investors, we currently see no reason to worry about the Dreamliner long term challenge to zero out the deferred balance and we currently think the Dreamliner is nicely boosting Boeing’s free cash flow and we expect the same for the first quarter. For Boeing it remains key to keep the delivery stream going and that is something that has proven to be difficult in recent weeks as also the Boeing 787 is coping with issues on the turbofans.

Disclosure: I am/we are long BA.

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.

China fund managers slash ZTE valuation after U.S. sanction

SHANGHAI (Reuters) – Chinese funds have slashed valuations of ZTE Corp (000063.SZ) (0763.HK) after the United States banned American companies from selling components to the telecoms equipment maker for seven years, a move ZTE said threatened its very survival.

The logo of China’s ZTE Corp is seen on a building in Nanjing, Jiangsu province, China April 19, 2018. REUTERS/Stringer

The U.S. action last week was sparked by ZTE’s violation of an agreement reached after it was caught illegally shipping U.S. goods to Iran. American companies are estimated to provide 25-30 percent of the components used in ZTE’s equipment.

Chinese mutual fund managers cut the value of the stock in their portfolios by 20-30 percent in a spate of announcements over the weekend, a blow to ZTE that suspended trading in its mainland and Hong Kong shares on April 17.

Around 40 Chinese mutual funds have adjusted the valuation of ZTE in their portfolios since it suspended trading. In the latest batch, five fund managers revalued the stock on Saturday.

FILE PHOTO: A ZTE smart phone is pictured in this illustration taken April 17, 2018. REUTERS/Carlo Allegri/Illustration/File Photo

Huatai-PineBridege and GTJA Allianz cut their valuation of ZTE’s mainland shares to 25.05 yuan, 20 percent lower than its last trading price. JT Asset Management – the most pessimistic – slashed the valuation to around 30 percent below ZTE’s last close of 31.31 yuan ($4.98).

Several funds with exposure to ZTE’s Hong Kong shares, including HuaAn Fund and Harvest Fund, cut valuations to about 20 percent below the last trading price of HK$25.60 ($3.26).

ZTE, which had a market capitalization of about $20 billion before trading in its shares was suspended, did not respond to a request for comment on Monday.

The valuation adjustment by mutual funds could be just preliminary, as the real impact of the U.S. sanctions needs to be assessed continuously as the incident unfolds, said Reagan Li, investment manager at private fund house Shanghai V-Invest.

On Sunday, ZTE said it was “making active communications with relevant parties and seeking a solution to the U.S. export denial order”. Earlier, the U.S. Commerce Department said it would allow ZTE to submit more evidence related to the matter.

The threat to ZTE’s business has triggered a broad sell-off in technology shares as investors fear the sector could suffer from the fallout, or that other firms could be targeted by the United States amid escalating trade tensions.

Shares in display maker BOE Technology (000725.SZ) slumped as much as 6 percent on Monday, even after the firm said it had not received any official information regarding U.S. sanctions in response to rumors in the market that it would be targeted.

The CSI Information Technology index .CSIINT of Shanghai- and Shenzhen-listed tech firms fell 2 percent.

“Investors are asking: who will be next on the U.S. sanction list?” fund manager Li said.

Reporting by Samuel Shen and Adam Jourdan, additional reporting by Anne Marie Roantree in Hong Kong; Editing by Himani Sarkar

Toshiba eyes cancelling chip unit sale if no China approval by May: media

TOKYO (Reuters) – Japan’s Toshiba Corp has decided it will cancel the planned $18.6 billion sale of its memory chip unit if it does not get approval from China’s anti-monopoly regulator by May, the Mainichi newspaper said on Sunday.

The logo of Toshiba Corp is seen behind cherry blossoms at the company’s headquarters in Tokyo, Japan April 11, 2017. REUTERS/Toru Hanai

A consortium led by U.S. private equity firm Bain Capital last year won a long and highly contentious battle for the unit, which Toshiba put up for sale after billions of dollars in cost overruns at its Westinghouse nuclear unit plunged it into crisis.

But Toshiba was unable to complete the sale by the agreed deadline of March 31 as it was still waiting for approval from China’s antitrust authorities.

Toshiba raised $5.4 billion from a share issue to foreign investors late last year and it had now decided it did not need to go through with the sale, the Mainichi newspaper reported. It did not cite any source.

“Toshiba has come to a decision that there is little necessity for the sale as it is no longer in insolvency,” the newspaper reported, adding that Toshiba would consider listing the unit if the sale did not go ahead.

A Toshiba spokesman said the company was still aiming to complete the sale as soon as possible.

In early April, Toshiba Chief Executive Nobuaki Kurumatani said his company would not use the option of cancelling the sale unless there was any “major material change” in circumstances.

Reporting by Makiko Yamazaki, Kiyoshi Takenaka; Editing by Robert Birsel

How Some New College Graduates Are Pulling Over $1 Million a Year (Courtesy of Elon Musk)

Artificial intelligence experts can command huge salaries and bonuses–even at a nonprofit.

OpenAI, a nonprofit research lab started by Tesla founder and CEO Elon Musk released the salary details of it’s employees–and they are striking. The organization’s top researcher was paid more than $1.9 million in 2016, and another leading researcher who was only recruited in March was paid $800,000 that year, according to a recent article in the New York Times.

Salaries for top A.I. researchers have skyrocketed because there is high demand for the skills–thousands of companies want to work with the technology–and few people have them. So even researchers at a nonprofit can make big money.

It likely has more to do with competition than interest in the field itself, however. The Times points out that both of the researchers employed by OpenAI used to work at Google. At DeepMind, a Google-owned A.I. lab in London, $138 million was spent on the salaries of 400 employees, translating to $345,000 per employee including researchers and other staff, the Times reports. 

OpenAI was started by Musk who recruited several engineers from Google and Facebook, two companies pushing the industry into artificial intelligence. People who work at major companies told the Times that while top names can expect compensation packages in the millions, even A.I. specialists with no industry experience can expect to make between $300,000 and $500,000 in salary and stock as demand for the skills continues to outstrip supply. 

JPMorgan, National Bank of Canada, others test debt issuance on blockchain

NEW YORK (Reuters) – JPMorgan Chase & Co (JPM.N) has tested a new blockchain platform for issuing financial instruments with the National Bank of Canada and other large firms, they said on Friday, seeking to streamline origination, settlement, interest rate payments and other processes.

FILE PHOTO: A sign outside the headquarters of JP Morgan Chase & Co in New York, U.S., September 19, 2013. REUTERS/Mike Segar/File Photo

The test on Wednesday mirrored the Canadian bank’s $150 million offering on the same day of a one-year floating-rate Yankee certificate of deposit, they said in a statement. The platform was built over more than a year using Quorum, a type of open-source blockchain that JPMorgan has developed inhouse and is in discussions to spin off.

Participants in the experiment included Goldman Sachs Asset Management, the fund management arm of Goldman Sachs Group Inc (GS.N), Pfizer Inc (PFE.N) and Legg Mason Inc’s (LM.N) Western Asset and other investors in the certificate of deposit.

Banks have poured millions of dollars to develop blockchain, the software first created to run cryptocurrency bitcoin, to streamline processes ranging from cross-border payments to securities settlement.

“Blockchain-related technologies have the potential to bring about major change in the financial services industry,” David Furlong, senior vice president of artificial intelligence, venture capital and blockchain at National Bank of Canada, said in a statement.

JPMorgan is considering spinning off Quorum because the technology has attracted significant outside interest, Umar Farooq, head of blockchain initiatives for JPMorgan’s corporate and investment bank said in an interview.

He said it was taking too much time to field requests for help from users at other companies.

Charging for assistance is not an option because software support is not the bank’s business, a person familiar with the matter said on condition of anonymity. The source was not authorized to discuss the matter publicly.

The spin-off discussions are in the early stages and the bank has received interest from financial institutions and large enterprise technology companies, Farooq added. He declined to name the companies.

JPMorgan plans to beef up the Quorum team with dozens of engineers from the bank’s other divisions who have become familiar with the technology, he said.

Blockchain is in the early stages of development in the financial industry, but JPMorgan is optimistic about its potential, Farooq said.

“We haven’t really seen a lot of really large scale things go into production yet. There are few cases where blockchain can really shine.”

Reporting by Anna Irrera; Editing by Richard Chang

Uber picks VMware's Zane Rowe as CFO: Bloomberg

(Reuters) – Uber Technologies Inc [UBER.UL] has picked VMware Inc’s (VMW.N) Zane Rowe as the top candidate for chief financial officer to lead preparations for the ride-hailing company’s initial public offering in 2019, Bloomberg reported on Wednesday.

The logo of Uber is pictured during the presentation of their new security measures in Mexico City, Mexico April 10, 2018. REUTERS/Ginnette Riquelme

The Silicon Valley startup is in advanced talks with Rowe, who is currently CFO at VMware, Bloomberg reported, citing people familiar with the matter.

An agreement has not been finalized yet and talks could still fall through, Bloomberg said citing one of the sources.

Uber’s board of directors has agreed to take the company public in 2019 and is searching for a chief financial officer to lead this effort. The position has been vacant since 2015.

VMware declined to comment. Uber was not immediately available for comment outside regular U.S. business hours.

Reporting by Subrat Patnaik in Bengaluru; Editing by Sunil Nair

IRS gives taxpayers one-day extension after computer glitch

WASHINGTON (Reuters) – The U.S. Internal Revenue Service said it would give taxpayers an additional day to file their 2017 returns after computer problems prevented some people from filing or paying their taxes ahead of Tuesday’s midnight deadline.

A general view of the U.S. Internal Revenue Service (IRS) building in Washington May 27, 2015. REUTERS/Jonathan Ernst

“Taxpayers do not need to do anything to receive this extra time,” the IRS said in a statement announcing the extension.

The agency said its processing systems were now back online.

Earlier, the agency said several systems were hit with the computer glitch, including one that handles some returns filed electronically and another that accepts online tax payments using a bank account.

The IRS said it believed the problem was a hardware issue and “not other factors.”

It was not clear how many taxpayers might have been affected, but the agency said it received 5 million tax returns on the final day of filing season last year.

“This is the busiest tax day of the year, and the IRS apologizes for the inconvenience this system issue caused for taxpayers,” acting IRS Commissioner David Kautter said in a statement.

The agency said taxpayers should continue to file their taxes as normal on Tuesday evening – whether electronically or on paper.

Taxpayers could also ask for six-month extensions, as President Donald Trump did. The White House said on Tuesday that Trump, because of the complexity of his tax returns, would file his by Oct. 15.

Reporting by Eric Beech; Editing by Diane Craft and Chris Reese

4 Dividend Growth Stocks Rewarding Shareholders With A Raise

As part of my monitoring process I review the list of dividend increases every single week. I use this exercise to check on the health of companies I own. I also check the list of dividend increases as part of my overall monitoring of companies I am reviewing for potential addition to my dividend portfolio.

I do find it helpful to narrow the list down by focusing only on the companies that have raised distributions every single year for at least a decade. Next, I tried to discuss each company and provide some helpful stats in order to determine if they look promising under certain circumstances.

The fact that a company that has raised dividends for a decade is just the first step in the process for further research. Making sure that those dividend increases are as a result of improving fundamentals is important. Equally important is making sure that the dividend company in question is also attractively valued.

Over the past week, there were four companies that raised dividends to their shareholders. Each one of those companies has managed to boost distributions for at least ten years in a row. The companies include:

The Procter & Gamble Company (PG) provides branded consumer packaged)goods to consumers in the United States, Canada, Puerto Rico, Europe, the Asia Pacific, Greater China, Latin America, India, the Middle East, and Africa.

Procter & Gamble increased quarterly dividend by 4% to $0.7172 per share. This marks the 62nd consecutive year that this dividend king has increased its dividend. P&G has been paying a dividend for 128 consecutive years. The ten year dividend growth rate is 7.20%/year.

However, as was discussed in my last analysis of Procter & Gamble, the company has been unable to grow earnings per share since 2008. Therefore, the dividend payout ratio has been increasing steadily over the past decade. Furthermore, the rate of annual dividend increases has been decelerating, as the payout ratio is close to reaching its upper limit. As a result, future dividend growth will be harder to come up. Therefore, while the stock seems fairly valued 18.70 times forward earnings and a dividend yield of 3.70, the lack of earnings growth and the high forward payout ratio at 68% make this company a hold. I will continue holding on to my existing P&G, waiting for a turnaround. However, the dividends will be allocated elsewhere.

Enterprise Products Partners L.P. (EPD) provides midstream energy services to producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, petrochemicals, and refined products. The company operates through four segments: NGL Pipelines & Services, Crude Oil Pipelines & Services, Natural Gas Pipelines & Services, and Petrochemical & Refined Products Services.

Enterprise Products Partners raised its quarterly distribution to $0.4275/unit, a 3% increase over distribution paid this time last year. This is 55th consecutive quarterly distribution increase for Enterprise, which has rewarded partners with a raise for 20 years in a row. The ten year distribution growth is 5.70%/year. This dividend achiever is one of the better managed partnerships out there (the other being Magellan Midstream Partners). I like the fact that it does have some margin of safety in its distributions coverage from DCF. However, as I have alluded before, the pass-through business model is more exposed when things get tough due to the needs for constant access to capital markets for growth. That being said, an investor looking for high current income may find the 6.60% distribution yield appetizing enough for some exposure to the partnership.

Automatic Data Processing, Inc. (ADP) provides business process outsourcing services worldwide. The company operates through two segments, Employer Services and Professional Employer Organization (NYSE:PEO) Services.

Automatic Data Processing raised quarterly dividends by 9.50% to $0.69/share. This dividend aristocrat has a 43 year track record of annual dividend increases. The Board of Directors is also considering another hike in November (consistent with historical pattern of dividend hikes). The ten year dividend growth rate is 11%/year. I like the growth in earnings over the past decade for ADP. In addition, I like their business model. Unfortunately, the stock has been overvalued for quite some time, while compounding earnings and dividends for shareholders. Right now ADP is selling at 27.60 times forward earnings and yields 2.40%. I would be interested in adding to my stock there on dips below $84/share (equivalent to a forward P/E below 20).

Tanger Factory Outlet Centers, Inc. (SKT), is a publicly-traded REIT headquartered in Greensboro, North Carolina that presently operates and owns, or has an ownership interest in, a portfolio of 44 upscale outlet shopping centers.

Tanger’s Board of Directors approved a 2.2% increase in the annual dividend on its common shares from $1.37 per share to $1.40 per share. Tanger is a dividend champion which has increased its dividend for 25th consecutive years. The ten year dividend growth rate is 6.70%/year.

The latest dividend increase certainly is on the low side, and it signifies the challenges in the retail industry today. Those challenges could impact portfolio occupancy, and from there impact rental income and FFO. That being said, Tanger is selling at a low valuation today of 9.30 times forward FFO. In addition, the REIT yields 6.60% today. The FFO forward payout ratio is 57.60%, which is sustainable and leaves a margin of error even if things deteriorate further from here.

The low valuation is the reason I have bought some shares as they have been sliding over the past year. While I do want growing earnings over time (or in the case of REITS – growing FFO/share), I do understand that a low valuation can result in great performance over time. The potential investor in Tanger today is getting paid 6.60% to hold on to a quality REIT, with a margin of safety in distribution coverage of 57.60% based on FFO/share. At that valuation, the REIT needs to grow only by 2% -3%/year to generate a total return of 10%/year.

Today we reviewed four companies that have raised dividends for at least a decade. We checked the latest dividend increase, and also the number of consecutive annual dividend increases. We then evaluated the dividend increase relative to the history of dividend increases and fundamentals. This is a monitoring exercise that I perform on a weekly basis in order to check my portfolio holdings, as well as companies I am interested in at the right valuation.

Disclosure: I am/we are long ADP, PG, SKT, EPD.

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

Why Crypto Is Being Sold as a Solution for Lower Real Estate Commissions

The real estate industry is known for its volatility. One market may be on its way up as another may be crashing to the ground. While real estate professionals and investors alike are used to navigating the ever-shifting ground beneath their feet, there’s a new real estate tech shake-up headed for the industry: cryptocurrency.

To get a better sense of the burgeoning relationship between real estate and decentralized protocols, I connected with co-founder Matthew Herrick at Deedcoin, an organization aiming to tokenize real estate transactions and, subsequently, reduce real estate commissions down to 1%. Our conversation touched on Deedcoin’s unique solution, as well as ways in which the industry as a whole is ripe for cryptocurrency-powered progress.

How do you think cryptocurrency can help people save money on real estate agent fees?

Herrick: Institutions have grown so large over time that some have neglected innovation. Meanwhile, the public has not yet had the technology to provide competitive options without corporate support.

Through decentralized ledgers, a group of people can join together and become a formidable alternative. Deedcoin is this crowd force of the real estate industry. We tokenize commission percentages and therefore giving the public the free market choice of what those should cost.

Homeowners can pay 1% commission through the Deedcoin Network, because we solve the marketing expenditure and customer acquisition problems for agents. Property sellers can utilize 50 Deedcoin to reduce the agent commission from 6% to as low as 1%. Buyers can use 20 Deedcoin to receive 2% of the purchase price back on any home.

Why did you peg Deedcoin’s initial launch price at $1.50 per token?

Herrick: Deedcoin are originally sold at launch for $1.50, but the whole idea of Deedcoin is to let the free market set the value of the solution. Using 50 Deedcoin lets buyers save 5% of their homes value.

For an average home of $240,000, this equates to $12,000 kept in an owner’s pocket while still receiving the same quality service through a local agent. We divided the ideal launch budget by the amount of token for establishing a wide user base through the launch and it came incredibly close to $1.50.

How much money did you raise for your initial coin offering?

Herrick: Deedcoin has been marketing to the public for just over 90 days and has sold just short of $1 million in DEED so far.

We have been southpaw in the way we have launched our project. Many ideas are coming to the token sale with an idea on a napkin called a whitepaper. The team and I think this is a major issue with the blockchain world.

We began in early 2017 in development, filing pending patents, building a platform, and recruiting a national broker network. Because we wanted to prove the concept before asking for money, Deed was a secret to the outside world until January 2018. We felt it was important to keep things quiet while we established the solution to avoid anyone with more funding beating us to market.

As regulation increases, I wonder, is Deedcoin SEC compliant? What about Know Your Customer (KYC) and Anti-Money Laundering (AML)?

Herrick: Yes, we are SEC compliant. Compliance has been a top priority for Deedcoin since our inception.

Unlike many token sales, Deedcoin is for a large percentage of the population. To be specific, anyone who lives inside a home should own at least 50 Deedcoin to protect their equity when they go to sell.

Due to our wide user base, it was crucial to work within SEC guidelines and sell to U.S. people who are homeowners in our initial footprint. To remain compliant, we developed the concept with our own funding to launch the network, making it a usable product.

Very early in our process, we secured Thompson Bukher LLP out of Manhattan to guide us through every regulation available. We have spent so much time on the phone with attorney Tim Bukher specifically, our teams have become friends. Additionally, for our SAFT sales, we filed a 506D exemption to let the SEC know what we are doing and have a CIK number.

For AML and KYC, all users are screened on registration against the Reuters International database for various factors including watch lists and the politically exposed. The solutions are too great in this technology to let a war with regulation prevent innovation. We believe that working within the guidelines allows the industry to grow and regulation to evolve structurally to provide consumer safety with stifling innovation.

A Fingerprint Pulled from a WhatsApp Image Leads to Multiple Drug Convictions in the U.K.

Police have used partial fingerprints drawn from a WhatsApp photo in securing 11 convictions related to drug trafficking in Wales, U.K. Representatives of the South Wales Police told the BBC that the approach was “groundbreaking,” and highlighted the potential to leverage evidence found on the phones of suspects.

The crucial photo showed a man’s hand holding an array of ecstasy tablets, and was found in a review of the contents of a phone seized in an arrest in the town of Brigend. The phone also contained messages indicating it had been used in drug deals. The photo only showed a portion of a finger, but that was apparently enough to confirm a link to an existing suspect. The discovery helped prove a large conspiracy to distribute drugs.

South Wales Police also announced that they were able to locate £20,000 (about $28,500) worth of bitcoin in a dealers’ accounts, another first for the department.

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WhatsApp is well-known for its end-to-end encryption features, and the Facebook-owned company has worked to reassure users that they are protected from the kind of data-sharing that has recently drawn regulatory attention to Facebook. But while encrypted messages and photos are hard or impossible to collect remotely, they’re much easier to access directly from phones already used to send or receive them.

In this case, the photo was located on a phone acquired in an August 2017 raid, in which cocaine and a large quantity of marijuana were also seized. The photo was reportedly used to offer drugs for sale on WhatsApp. Another Facebook-owned platform, Instagram, recently filtered several hashtags used to market illegal drugs there.

Dave Thomas, a spokesperson for the South Wales Police, told the BBC he believed it was the first time a photo had been used to provide fingerprint evidence in Wales. Thomas said the incident pointed to the potential for social media images and other records to be used to identify and prosecute crimes.