Tech Letter Archives

The Must-Have Apps for New Home Workers

Here are a few hacks as millions enter the new world of digital nomadism – home as an office is now a sink-or-swim proposition.

I can tell you that after the 6.6 million unemployment claim number dropped like a bomb, many more people will be forced to get trained up as aspiring remote workers.

Sure, groceries stores are still hiring, but the health scare will funnel many future workers to stay in the confines and cleanliness of their own homes to generate income.

Another lasting effect will be supercharging the digital economy by forcing both supply and demand onto the internet.

Think about how much the cloud has helped us already and now the industry has developed to the point where digital nomads are using these services to underpin their daily operations.

First, I will make a few assumptions such as businesses have already discovered certain “can’t miss” services such as Microsoft Teams Office 365 that delivers us the beauty of Microsoft Word, Excel, PowerPoint.

G Suite’s array of highly powered instruments are another assumption I will imbed into this discussion as most people have integrated them into their lives.

These tools consist of Google Docs, a cloud-based Microsoft Word alternative; Google Sheets, a cloud-based Microsoft Excel alternative; Google Slides, a cloud-based Microsoft PowerPoint alternative; and Google Drive, a cloud storage app.

Google Docs and Google Drive are particularly useful collaboration software for remote teams who need storage and teamwork rolled into once set of services.

Many businesses are reliant on Facebook to sell their physical products, therefore, taking advantage of a News Feed Eradicator for Facebook will come in handy.

After the Facebook’s login, users are thrown into the insane vortex of streaming jargon that is now Facebook’s news feed and hours can be wasted for months on end.

Sure, it’s nice to catch up with a high school girlfriend, but that won’t generate outperformance.

Klokki for Mac is an automatic time-tracking app that will boost productivity by maximizing the thing we never have enough of - time.

With its ability to create custom tracking rules, you will be able to track time by automating this process.

Besides the Auto-Tracking technology, Klokki delivers the power of a massive tool packed in one small and beautiful Mac app that lives and breathes on your menu bar.

Also, these functions can be useful for upper management who can track employees who are now all working at home.

It’s not a secret that this migration to 100% digital work from home doesn’t sit well with many managers who thrive by micromanaging, this software puts the control back into the managers’ hands.

1Password is a name that's representative of password managers. It's been around since 2006, offering support for a growing list of devices.

Right now, you can access your 1Password and the software will store and fill your passwords.

Even for a company of 10 people, management will not want crucial passwords floating around gifting hackers an easy way into their fortress who then might destroy the inner workings of a business.

vidIQ is a robust tool for the creative companies out there since many media products have offshored onto YouTube to leverage uploading free videos to a monetizable audience.

Of course, Adobe photoshop is great for those who actually need to create the media content, but with the vidIQ Competitors Tool, you’ll get a unique peek behind the curtain at what your competitors are doing to rank highly and attract those golden views and subscribers.

That’s the beauty of data analytics and this hack will enable you to measure up your rivals.

You’ll be able to instantly track the video creators who are important to your channel, whether they are big influencers setting trends in your sub-sector, or channels delivering breakthrough content.

The Competitor Tool allows you to piggyback on the competition and leverage what they do right for your own YouTube strategy.

Weirdly enough, tracking others to keep tabs on the competition is important to understand the changing dynamics of the internet and sub-sectors in it.

And the best way to track your own keywords are by Google Alerts – if a news article trends with selected keywords then an email it sent with direct links to the relevant article.

Email Hunter is another app that is self-explanatory.

If you cannot find someone’s email, then plug in the name and this app will scrape the internet to find public places that could retrieve this information.

In a digital world where email is the best way to get to know a customer, this app is a diamond in the rough.

Since every company is now turning into a media company, cloud storage and ample space is needed to import and export big media files.

Services that are reliable are Dropbox, Box, Google Drive and many others.

Slack is a potent app that is email on steroids and is more widely used than ever. Another alternative is Microsoft Teams that has also been easily integrated into its set of products.

Lastly, video conferencing apps are the closest service that can provide a meeting to hash out those hard-to-quantify issues.

A company can almost not function if it doesn’t have Zoom and at the end of December last year, the maximum number of daily meetings conducted on Zoom was approximately 10 million, according to the company. In March this year, they recorded more than 200 million daily users.

Zoom is now ranked as the number two app in the UK and number one in the US, after its surge in popularity.

With these optimal apps supporting remote business, many will be able to survive this deep recession and even up-skill themselves and enjoy a fruitful recovery as they work from home.

April 3, 2020 - Quote of the Day

Tech Letter

“I'd rather Apple cannibalize Apple than somebody else cannibalize Apple.” – Said CEO of Apple Tim Cook

April 1, 2020

Tech Letter

Mad Hedge Technology Letter
April 1, 2020
Fiat Lux

Featured Trade:

(BROKEN GLOBAL SUPPLY CHAINS AND YOUR PORTFOLIO)
($COMPQ)

Broken Global Supply Chains and Your Portfolio

Tech Letter

The sushi has hit the fan – supply chains are broken.

Let’s gaze East to the inner workings of the tech world and it is clear that the supply chain has been under pressure since the onset of the trade war but the coronavirus is now making operations untenable.

China was the first to lockdown, but now the rest of Asia has followed suit smothering the rest of the region which is economic suicide.

Feeling out the situation, I picked up the blower to get a better understanding of what was going on in the center of the tech manufacturing world and the outlook appears bleak.

The electronic manufacturing sector in South East Asia is hit hardest by the coronavirus as many of the test equipment and chip producers face an imminent drastic shortage of raw materials, an unprecedented situation that has disrupted production.

One manager whose company produces 5G radio frequency (RF) chips have bottlenecked due to the disruption in the supply chain.

They use raw materials from the United States but also import from China and although they have 85% of materials to make the RF chips, they still have to put operations on ice because the suppliers in China can’t ship the essential 15% of material needed to complete manufacturing.

This batch of shipments is supposed to be the largest quantity of 5G chips from South East Asia in the first quarter and has now been officially delayed until logistic problems can be solved.

The company can still fulfill its quota for 3G and 4G RF chips, but it’s really hit or miss at this point.

And for manufacturing the older chips, they have sufficient stock of raw materials lasting three to four months, and by then they hope to solve the logistic headwinds from China.

In general, if the virus coerces South East Asian societies to shutdown their economy for another 5 months, the entire Southeast Asian electronic manufacturing sector will be decimated as bills and debt payments come due.

In fact, a current shortage of components is forcing prices to surge 10%-20% for active and passive electronic components.

Another prominent manufacturer who produces about 30% of the RF chips for the worldwide market told me that this is the “biggest disaster to ever hit the local electronic manufacturing sector.”

He continued to say that his supply chain has been hit between “30%-40%.”

About 50% of their raw materials come from Japan, and the rest from the United States and China, and because of an ensuing lockdown in Japan, shipment delays will happen for customers in Singapore, China, and the United States.

To make matters worse, testing engineers cannot travel abroad to install test equipment for customers because of international border closures.

This manufacturer projected revenue annual growth of -5% after initially forecasting for +10% in January.

Another executive at a semiconductor test equipment company told me that he fully expects sales to dissipate by 15% in the first quarter compared to last year.

Customers around the world, not only in the U.S., are delaying orders because they aren’t sure whether there will be new equipment to test because of the delay in the production and shipment of electronic components manufactured in China.

The executive sees a turnaround in June if shipping lanes and borders open, which is still a big IF.

How does this affect the end electronic device market like your iPhone or Amazon Echo?

Smartphone manufacturers need to come out with new products by mid-2020 to sneak in that yearly iteration before that window shuts and that timeline will certainly be pushed back.

Building a smartphone is usually done on a razor-tight deadline, but this puts off anything until they can finally get their hands on the parts needed to build out the phone.

If you think the 3^rd quarter would be the time that these new phones could hit the market, then think again. It is likely that the coronavirus domino effect will force smartphone makers to sell these devices next year instead of pushing back a whole refresh cycle of revenue.

Apple is coming to the same conclusion with their 5G phone as well.

The tech world is dangerously close to missing one full year of refresh products and the scarring effects could last much longer.

Then there is the issue of demand and the lack of it moving forward for these products.

We must ask ourselves how scarred are tech consumers?

How scarred are tech companies?

What regulations should shape how businesses should be working as we enter into a new tech world and U.S. economy?

The first order of the day after the coronavirus passes is businesses and consumers will need to restock cash reserves for a rainy day.

The first reaction we will see are small tech companies decline quite dramatically in the second quarter because of the nature of high yields not being able to receive financing because of their low credit grades which could result in an initial barrage of defaults.

It will be just a small blip for the behemoth as they can take the financing if they truly need it and many don’t.

Tech balance sheets also need healing after this bout of craziness.

Not getting caught off guard will now be the new normal.

Even if tech dips into the $2 trillion relief package – it has a long-term cost associated with it that tech businesses must absorb.

How that impacts economic growth is tough to decipher now but it most likely will punish tech growth companies whose mantra is growth at any cost.

There will be a massive rebalancing and redefinition of what outperformance means because the government inherently will be playing an outsized role in our lives for years to come and what that means to lower tech profits and worsening stock multiples will play out in the tech markets.

April 1, 2020 - Quote of the Day

Tech Letter

“Technology is the knack of so arranging the world that we do not experience it.” – Said American existential psychologist Rollo May

March 30, 2020

Tech Letter

Mad Hedge Technology Letter
March 30, 2020
Fiat Lux

Featured Trade:

(THE NEW CROWN JEWELS OF SOCIAL DISTANCING)
(DOCU), (SIRI), (ZNGA), (NOK), (AMZN), (WORK), (MSFT), (ZM)

The New Crown Jewels of Social Distancing

Tech Letter

The second tier of social distancing tech stocks will do well in this brave new world in which digital lives have superseded physical ones.

Sure, most of you already know that Amazon (AMZN), Slack (WORK), Microsoft (MSFT), Zoom Communications (ZM), and Teladoc Health (TDOC) are the crown jewels of current social distancing tech stocks, but there is another group that should also outperform.

Here are 4 that you should take a look at with DocuSign being the best of the bunch:

DocuSign (DOCU)

Teleconferencing and other niches have come front and center and consummating deals have migrated to one place since people cannot physically sign their name from pen to paper.

Electronic signatures were basically a cottage industry when it came out, but it is here to stay and this company has investors buzzing. Although the volume of business agreements being signed globally may temporarily slip, those that are continuing to work are enabled by DocuSign to close agreements without meeting eye to eye.

I expect resiliency in the type of products DocuSign provides and the remote implementation options.

DocuSign is well-positioned within the defensive category of digital transformation spend. Their recent acquisition of Seal Software will help boost DocuSign’s ability to leverage the power of artificial intelligence in the domain of contract analytics.

The opportunity to mitigate time spent on manual workflows through the addition of Seal to the portfolio can bolster the value proposition and drive ROI (return on investment) for customers.

The trajectory of the company was validated by DocuSign’s strong fourth-quarter earnings results with adjusted earnings increasing 12 cents per share which is a 100% increase year over year.

Just as impressive, DocuSign posted quarterly revenue of $274.9 million, an increase of 38%. As the data suggests, the signals all point to this company continuing its outperformance.

The e-document market has been monopolized by DocuSign with competition shut out, and as business goes 100% virtual in the current environment, this should have a positive network effect that will resonate when the world opens back up.

The next 3 stocks aren’t growth companies like DocuSign but are cheap stocks under $10 that might be worth a look.

Sirius XM Holdings (SIRI)

With all the extra time at home, satellite radio has hit the jackpot, making their services much more appealing.

Since Sirius and XM Radio merged in 2008, the combined Sirius XM Holdings has enjoyed a near-monopoly on satellite radio.

Sirius built on that with the 2018 acquisition of Pandora, the music streaming product, helping to fill the sails again with rapid revenue growth; its audio products now reach more than 100 million people.

Sirius' situation is appearing healthy and added a further 1.1 million subscribers in 2019 alone, bringing its total paying subscribers to roughly 30 million. The company's audacious strategy of partnering with auto manufacturers to pre-install SiriusXM in new models should help steadily grow the business.

Zynga (ZNGA)

This video game stock is cheap and could be a beneficiary of the stay at home revolution.

Zynga's portfolio of popular games, combined with hyper-charged growth, makes it one of the best cheap stocks to buy under $10.

Last quarter, the social gaming developer behind franchises like Words With Friends, Zynga Poker, CSR Racing, and FarmVille set new company revenue records up 48%.

While growth is likely to decelerate quickly from such temporary coronavirus catalysts, I expect double-digit revenue growth in 2020.

Still, Zynga is holding up remarkably well, especially in the COVID-19 era, as people increasingly turn to mobile devices for entertainment.

Nokia Corp. (NOK)

Nokia's expected earnings growth is impressive with Wall Street looking for an 8% bump in 2020 and roughly 30% profit growth in 2021.

Cheap stocks to invest in under $10 don't often come in the form of well-oiled global corporations valued at $15 billion.

The Finnish communication equipment telecom is one of the rare exceptions against the rule.

Sales have grown 14% annually for the last five years. Nokia may end up one of the 5G stocks to watch in the coming years because of the stigma of Huawei forcing many Europeans to go with brands closer to home.

Nokia pays a hefty 8% dividend as well and will never need a last-second bailout.

March 30, 2020 - Quote of the Day

Tech Letter

“Every technological revolution takes about 50 years.” – Said Founder of Alibaba Jack Ma

March 27, 2020

Tech Letter

Mad Hedge Technology Letter
March 27, 2020
Fiat Lux

Featured Trade:

(THE COMING AD HIT FOR GOOGLE AND FACEBOOK)
(FB), (GOOGL), (TWTR), (SNAP)

The Coming Ad Hit for Google and Facebook

Tech Letter

Expect lower revenues from Facebook (FB) and Google (GOOGL) because ad revenue has taken a hit.

It makes no sense to spend ad money on Facebook and Google ads for restaurants and hotels during times like this and that’s if they even still exist today.

The accumulative effect of the bankruptcies in other parts of the economy will shrink Google and Facebook’s ad dollar coffers.

The two internet giants together could see more than $44 billion in worldwide ad revenue evaporate in 2020, but that doesn’t mean these companies won’t be profitable.

For 2020, Google's total net revenue is now projected to be about $127.5 billion, down $28.6 billion for the year.

Facebook’s management said there was “a weakening in the ads business in countries taking aggressive actions to reduce the spread of COVID-19.”

Facebook’s overall usage has increased during the pandemic, with data up more than 50% over the last month in countries hit hardest by the virus, but the spike in volume isn’t in a form in which they can monetize it.

In 2021, Facebook’s advertising business is projected to recover growing 23% year-over-year to $83 billion.

I now expect Google to generate $54.3 billion in operating income (43% adjusted EBITDA margin) and Facebook will make $33.7 billion (49% margin), in 2020.

Digital platforms have felt the abrupt halt in spending, given the relative ease of stopping ad spend.

Secondary ad companies are also performing worse than expected with forecasted revenue for Twitter (TWTR) down by 18% (to expected revenue of $3.2 billion) while Snap (SNAP) ad revenue is expected at $1.66 billion, 30% lower.

Amazon’s ad business boasts a fortified moat because their revenue comes from product searches and those have experienced a surge in demand because of the coronavirus.

Facebook-owned WhatsApp has increased by 50% and that number is up 70% in Italy as the Italians go through a severe outbreak and lockdown.

Another side effect from the virus is the reduction of video streaming quality to ease the strain on internet networks, as YouTube and Netflix (NFLX) have also done.

Facebook is monitoring usage patterns in order to make the system more efficient, and add further capacity as required.

To help ameliorate potential network congestion, they temporarily reduced bit rates for videos on Facebook and Instagram in certain regions.

Facebook is conducting tests and further preparing to respond to any problems that might arise with network services.

Facebook and Google’s weakness proves that even the largest of Silicon Valley tech companies are battling with revenue restructuring while waiting for the U.S. economy to open up.

Although this is terrible news for Facebook and Google, the Nasdaq index is in the process of bottoming out.

The 3.28 million U.S. jobless claims were unprecedented but could very well represent a flushing out of the horrible news as the Nasdaq index spiked by 4% intraday.

Tech shares have had this job claim number baked into the share price for quite a while and we knew it was going to drop like an atomic bomb.

Some estimates had 4 million unemployed and the pain on main street is real, just search on Twitter – hashtag #lostmyjob.

The anecdotes stream down about individuals coming to grips with a sudden sacking and new reality of zero income.

This is just the first phase of job removals and the silver lining is that tech companies largely avoided the worst of the firings partly because many tech jobs can be moved remotely unlike many hospitality jobs.

The other silver lining is that the health scare is supercharging the digital ecosystem as society has effectively been moved online.

Any short-term weakness in tech companies will only be brief as tech stock will lead the recovery as the economy starts to open up again and the record amount of fiscal stimulus breathes life into hobbled companies.

Tech investors should prepare to pull the trigger.