South Asia trade talks, Brazil impeachment trial, tattoo hair

Good morning, Quartz readers!


South Asia finance ministers meet in Islamabad. Country representatives will discuss trade promotion, as well as financial, banking, and investment opportunities in the region. Due to tensions with Pakistan, however, India’s finance minister will send a representative instead of attending the two-day conference.

Angela Merkel visits the Czech Republic. The German chancellor will discuss Turkey’s role in the refugee crisis with Czech prime minister Bohuslav Sobotka as part of her post-Brexit European tour. A number of demonstrations are planned in the country, which has seen a rise in anti-immigrant sentiment.

Dilma Rousseff’s impeachment trial begins. Brazil’s suspended president has been charged with falsifying the national budget to make its deficit appear smaller. Her supporters and detractors have attempted to shape public opinion ahead of the trial.


The American University of Afghanistan in Kabul was attacked.Eyewitnesses described a scene of terror, with students fleeing from an explosion, followed by gunshots. Twelve people died and dozens suffered injuries in the assault. Two assailants armed with guns and explosives were killed, but no group has yet claimed responsibility for the attack.

Turkey launched its biggest offensive yet against ISIL. Turkish troops and tanks encountered almost no resistance when they entered Jarablus, ISIL’s last foothold on the Turkish border. The effort is part of a US-backed initiative to fight the militant group.

The death toll in Italy’s earthquake rose reached 247. Towns in Umbria, Lazio, and Marche were destroyed in the recent quake, and authorities are still searching for survivors. An earthquake of similar magnitude struck Myanmar yesterday (Aug. 24), killing three and destroying scores of ancient temples.

Colombia reached a peace deal with FARC rebels. The historic agreement, which ends the country’s 52-year war, was reached afterfour years of negotiations. Now begins a feverish campaign to ratify the agreement, which includes a withdrawal of troops, rural development, and political participation for the rebels.

Iranian vessels harassed a US warship near the Strait of Hormuz. The incident took place on Tuesday, a US defense officialsaid yesterday (Aug. 24), adding it “could have led to further escalation.” Whether it was ordered by Tehran or undertaken by rogue commanders remains unclear.


A huge contingent of Japanese businesses will visit Nairobi this August. Approximately 2,000 Japanese company representatives, including 80 c-suite, will be in Nairobi for the sixth TICAD, where they’ll share industry insights into tech, infrastructure, and energy trends with African development partners. Attendees’ collective expertise will be crucial to building sustainable development partnerships in the region.


Drugmaker shares fall
Price control fears rise. One shock
EpiPen can’t cure


Michael Tabb on humanity’s best shot at seeing life outside our solar system. “NASA knows there are billions of Earth-sized exoplanets out there, many of which could (for better or worse) host life. But until we can travel faster than the speed of light, we’ll never actually be able to reach most of them. With the discovery of Proxima b, an Earth-like planet just 4.2 light years away, that could change.”Read more here.


Let’s not eulogize office culture just yet. For many, working from home has blurred the distinction between a flexible work schedule and a life that’s mostly work.

Fat white men wearing speedos on the beach should be a crime. Never mind burkinis, outlaw that instead—”for the sake of our traumatized children.”

Don’t write off the movie remake. Producers desperately avoid describing films as “reboots,” but some of the greatest movies are reimagined classics.


Qatar’s oil boom created a booming art industry. Too bad it crashed when oil prices bottomed out at $28 dollars a barrel last year.

Magic has gone mainstream. More and more people are turning to mysticism and the occult to fill spiritual gaps in their lives, making ‘mysticore’ a new norm.

A Filipino fisherman hoarded the world’s largest pearl. He kept the precious 75-pound jewel for 10 years as a good luck charm.

Tattoos are being used to disguise hair loss. Tiny dots fromscalp micro-pigmentation can mimic hair follicles on bald heads.

To ward off terrorism the Italian government is giving teens a €500 cultural bonus. It hopes the money—which can be spent on theaters, museums, and concerts—will keep them from becoming radicalized.

Our best wishes for a productive day. Please send any news, comments, Qatari art, and enormous pearls to You can download our iPhone app or follow us on Twitter for updates throughout the day.

#Merkel’s post-#Brexit tour, Typhoon #Mindulle, empathetic Danes

Good morning, Quartz readers!


John Kerry travels to Nigeria, Kenya, and Saudi Arabia. The US secretary of state will meet with foreign ministers on issues ranging from counterterrorism to economic stability. Meanwhile, US president Barack Obama will visit flood-damaged Baton Rouge, Louisiana, where at least 13 people have died and thousands have lost their homes.

The US commerce department reports on sales of new homes in July. Economists surveyed expect a 2% drop from last month, but that would still leave sales of single-family homes slightly above their second-quarter average—and indicate the recovery is still intact.

Remembering the victims of slavery. UNESCO’s “International Day for the Remembrance of the Slave Trade and its Abolition”marks a 1791 uprising of slaves in Haiti that became a turning point for the establishment of universal human rights. Researchers estimate that today some 21 million people remain in slavery.


Angela Merkel began her post-Brexit tour. The German chancellor kicked off a week of intense diplomacy with core EU allies, including Italian prime minister Matteo Renzi and French president Francois Hollande. The meetings are part of her preparation for a summit of 27 EU countries in September to discuss the future of European integration. The UK isn’t invited.

Typhoon Mindulle struck Japan. Two deaths and dozens of injuries were reported amid heavy rains and strong winds. Authoritiescanceled hundreds of flights to and from Tokyo (which took a direct hit), warned of flooding and landslides, and evacuated a commuter train that tilted after the earth beneath the rails gave way.

More fallout for Ryan Lochte. A week after Lochte was accused by Brazilian authorities of lying about an alleged robbery in Rio, Speedo announced it was cutting ties with the US swimmer, calling his behavior counter to the brand’s values. Three other companies—Ralph Lauren, Syneron-Candela, and Airweave—quickly followed suit.

The Philippines counted the toll of its war on drugs. President Rodrigo Duterte vowed to rid the country of drug dealers when he took office in June. Since then, more than 700 people have been killed in drug-related police operations, and over a thousand have been murdered by vigilantes, the country’s top police official announced.


Calm markets ease up,
Greater wealth is shared by all,
But mostly Bill Gates


Anne Quito on fixing the most annoying feature of video calls.“Office workers who embrace the flexibility and productivity of working from home frequently rely on videoconferencing services to ‘call in’ to meetings—only to be distracted by their own physical flaws, bad hair days, and under-eye circles, which appear with awful clarity on screen. For the designers trying to fix it, this nagging distraction even has a name: the appearance barrier.” Read more here.


Destroying history should be a war crime. The trial of an Islamist fighter charged with ruining parts of the fabled city of Timbuktuacknowledges the sanctity of our cultural heritage.

Women drink to deal with sexism. Society’s unrealistic expectations and ingrained misogyny are driving women to the bottle.

TV shows are terrible at showing text exchanges. Directors need to cut the cheesy phone screen and emoji shots, and trust viewers to connect the dots.


Hey Siri, it’s Streisand, not Streizand. Tim Cook agreed to fix the pronunciation by Apple’s personal assistant of the iconic singer’s name after Streisand called him to complain.

Japan sells the most physical music in the world. The island nation’s large aging population, averse to digital downloads, prefers to browse its 6,000 music stores.

Ramen noodles have replaced cigarettes as a prison commodity. Food cost cuts in overcrowded US prisons are making the noodles a prized currency.

Nikola Tesla dreamed up killer drones a century ago. The inventor outlined a destructive wireless drone-like device in an 1898 patent filing.

Empathy training is a vital part of Denmark’s national curriculum. Schoolchildren learn to process their emotional responses in weekly sessions.

Our best wishes for a productive day. Please send any news, comments, antique patents, and Ramen noodle recipes You can download our iPhone app or follow us on Twitterfor updates throughout the day.

#Brexit summit, #Turkey bombing, quantum satellite

Good morning, Quartz readers!


The leaders of Germany, France, and Italy will mull over Brexit.Angela Merkel, François Hollande, and Matteo Renzi will convene onthe small Italian island of Ventotene to discuss the UK’s planned exit from the European Union. An informal EU summit on the matter will be held next month.

Pfizer closes in on a $14 billion acquisition of Medivation. An all-cash deal could be announced as early as today. The move would give the pharmaceutical giant Xtandi, a blockbuster prostate-cancer treatment. It’d be the latest in a series of giant deals in the drug and biotech industries.

The production company behind Harrison Ford’s on-set injury is sentenced. Foodles Production pleaded guilty to criminal charges in relation to a mishap that resulted in a broken leg for the actor during the shooting of the most recent Star Wars film. The accident occurred at Pinewood Studios in London.


An investigation showed Donald Trump’s companies have at least $650 million in debt. The New York Times reported the number (paywall), which is double the amount he’s listed in public filings so far. It also found his financial backers include ones he’s attacked during his campaign, among them Goldman Sachs.

A suicide bomber killed over 50 people at a wedding in Turkey.President Recep Tayyip Erdogan blamed ISIL for the attack in the southeastern province of Gaziantep, and said the bomber was aged 12 to 14. More than 90 people were wounded in the blast.

India appointed a new head for its central bank. Prime minister Narendra Modi chose Urjit Patel as the next Reserve Bank of India governor. He’ll assume his new position after Raghuram Rajan steps down on Sept. 4, and is expected to continue his predecessor’s policies.

Brazilian footballer Neymar led his nation to Olympic gold. In scoring a winning penalty kick, Neymar da Silva Santos Jr. topped a 5-4 shoot-out win over Germany, after a 1-1 draw. After the match, he surprised many by stepping down as team captain.


Chase Purdy on what was truly ugly about those naked Donald Trump statues that cropped up in cities last week. “Aside from preying on people’s anxieties and generally being mean-spirited, perhaps the most depressing aspect of this kind of political dialogue is that it accomplishes nothing. It might draw a momentary wry smile, but it doesn’t inspire thoughtful conversation about foreign policy or race relations or the pressures small-business owners face.” Read more here.


The cookie bake-off for first lady contenders is a calcified indicator of lingering sexism in American politics. It started in 1992 when Hillary Clinton made then-controversial remarks about her career ambitions.

Rio de Janeiro really amped up police forces during the Olympics. So what happens to all those resources after the sporting bonanza is finished?

Scientists have already created drugs that could make us better people. But is it ethical to use pharmaceuticals to tinker with our morals?


The Olympics closing ceremony referenced Super Mario.Japanese prime minister Shinzo Abe transformed into the video game character in the handover segment pointing to the 2020 Tokyo games.

The ideas of Sigmund Freud are being put to the test in an Argentine prison. Inmates there are working through their emotional issues with a psychoanalyst, who talks to them with no guards in the room.

China just launched a wild new satellite into space. Using quantum teleportation, the Chinese will try to make information traveloutside of space and time.

The Olympics started as a male-only competition to honor the Greek god Zeus. But there’s evidence the Greeks also held another kind of Olympics, for women, in honor of Zeus’s wife, Hera.

NASA is opening its vaults. The US space agency is now making its research data available to the public via a web portal. It’s not the prettiest site just yet, but it hosts a wealth of knowledge.

Our best wishes for a productive day. Please send any news, comments, Mario sightings, and cookie recipes to You can download our iPhone app or follow us on Twitter for updates throughout the day.

Weekend edition—The perils of apology, Olympic medal-counting, Japanese ruin-hunting

Good morning, Quartz readers!

This has been a week for saying sorry. Olympic swimmer Ryan Lochte apologized for being less than candid about being allegedly robbed in Rio. Donald Trump apologized, through gritted teeth, for sometimes saying “the wrong thing.” The Clinton Foundationapologized, sort-of, for receiving foreign donations from sometimes questionable sources. And the US State Department said, well, itwasn’t really a ransom, but, um, yes, we did withhold that $400 million for Iran until we got our hostages back.

But is public contrition a good sign? Not necessarily. As the Harvard Business Review noted in 2006, “leaders will publicly apologize if and when they calculate the costs of doing so to be lower than the costs of not doing so.” Japan’s famously elaborate corporate apologies are, as Bloomberg’s William Pesek wrote last year, “more about distraction than accountability,” a kabuki performance in which all those solemnly bowing executives “feign taking responsibility for crises, before returning to business as usual.”

So if there are more apologies, it’s probably not that people are being more honest about their failings, but simply that the cost of apologizing is going down. Tech startup mantras like “move fast and break things” or “fail fast, fail often” have permeated the broader culture. Failure is celebrated as a sign of strength. The cost of lying and being caught out or even publicly shamed is also plummeting, as both US presidential hopefuls and British Brexiteers have been learning to their delight.

This year happens to be the 40th anniversary of Elton John’s “Sorry seems to be the hardest word.” In the public sphere, at least, it’s on the way to becoming the easiest.—Janet Guyon and Gideon Lichfield


Japan’s economic growth model and advanced technology informs its development partnerships in Africa. This August’s sixth Tokyo International Conference on African Development in Nairobi, Kenya will facilitate high-level discussions between over 6,000 world leaders from organizations like the UN, UNDP and African Union Commission. Focused on tackling economic development challenges, TICAD’s collective expertise will be crucial to implementing pathways to skill development and economic diversification.


More evidence against on-demand-everything. Alison Griswold explores the opaque but sometimes exorbitant pricing of Postmates, and argues that it’s another sign of the flawed economics of on-demand delivery. Startups “are falling short of their founding promise to make instant-anything cheap, and they don’t want customers to know.”

Joseph Stiglitz gets to say “I told you so.” He prophesied that the EU wouldn’t work, and that neoliberal economics would leave lots of people worse off and angry. Events seem to be proving him right. Matt Phillips interviews the Nobel economist about why bad ideas are so hard to dislodge once they get stuck in policy-makers’ heads.

How Darwin’s finches explain Japanese music sales. Japan has more music stores and CD sales than anywhere else in the world. Mun-Keat Looi looks into the history and economy of the industry, and argues that Japan’s reluctance to adopt downloads and streaming is just one more example of its peculiar isolation as an technological ecosystem.

Benvenuti to the hide-and-seek world championship. A small Italian party town that was abandoned after a landslide is having a renaissance, as the setting for the world’s biggest game of hide-and-seek. Annalisa Merelli talks to the organizers.

Our Olympic favorites. Kabir Chibber rounds up 10 of Quartz’s best on the Rio Games, including the physics of Simone Biles, why Brazilians love booing, and the financial burden of being a gold medalist. Plus, Selina Cheng on the democracies that have adoptedCommunist strategies for winning lots of medals, Ana Campoy on thescience of predicting medal counts, and Maria Thomas on theshameful way Indian authorities have treated their athletes.


Japan’s modern ruins are a time capsule for urban explorers.The bubble economy’s legacy of ghost towns, shuttered theme parks, moldering strip clubs, and over 8 million abandoned homes are an unspoiled wonderland for a new generation of urban adventurers. Tim Hornyak visits some for the Japan Times.

Walmart’s crime problem is driving cops crazy. Aggressive cost-cutting has led crime at Walmart stores to spiral. When you’re the biggest private employer in America, that’s more than just a local problem, as Shannon Pettypiece and David Voreacos explain in Businessweek.

How ISIL was born. It’s worth braving Foreign Policy’s rather tight paywall for this remarkable account by Harold Dornboos and Jenan Moussa, based on extensive interviews with an active Islamic State fighter, on the five-day summit of top jihadists at which the organization was founded in 2013. (Spoiler alert: Barack Obamawasn’t there.)

Read your tech news with skepticism. Tech giants limit access and manipulate what’s said about them to an unprecedented degree. Adrienne LaFrance, for Nieman Lab, argues for why journalists—and their readers—should be wary of old-fashioned product coverage, and look instead to merge an understanding of politics, society, culture and human rights with technology reporting.

Is it moral to have kids in the face of climate change? A Johns Hopkins University philosopher argues for childlessness, not only to slow global warming, but also to spare your potential progeny from living amid environmental devastation. Moreover, he has a plan for creating the necessary incentives. Jennifer Ludden profiles his quixotic campaign for NPR.

Our best wishes for a relaxing but thought-filled weekend. Please send any news, comments, insincere apologies, and pictures of Japanese ruins to You can follow us on Twitter here for updates throughout the day.

CWS Market Review – August 19, 2016

CWS Market Review

August 19, 2016

“To be an investor you must be a believer in a better tomorrow.” – Benjamin Graham

I’ll briefly summarize this summer’s stock market:

Up, Down, Up, Down, Up, Down, Up, Down, Up, Down…

I exaggerate. But not by much. Here are some numbers. The last 14 times the S&P 500 had a down day, it closed higher the following day 13 times.

That’s the meanest mean reversion I’ve ever seen. It’s as if no trend can get itself going unless it’s a trend in not being a trend. Of the last 13 up days, ten have been followed by down days. Like I said, up, down, up, down, up, down.

This week, we just snapped an “alternating streak” of nine days in a row. This comes on the heels of an 11-day run in July. The Nasdaq Composite has now gone 37 days without posting back-to-back down days. What’s causing all this indecisiveness? In this week’s CWS Market Review, we’ll take a closer look.

We’ll also discuss our two Buy List earnings reports from this week, Hormel Foods and Ross Stores. Both stocks beat estimates and, more importantly, both stocks raised guidance. I’ll also preview HEICO’s earnings report for next week. The quiet little stock is our biggest winner this year (+36%). But first, let’s look at why low-quality stocks are suddenly popular.

The Low-Quality Rally

I was thinking of calling this “The Archie Bell Market” (ask your parents). The daily range has tightened up. The difference between the S&P 500’s daily highs and lows is at historically narrow levels. Despite the stock market’s aimlessness, I don’t believe it’s indicative of a larger theme, except that it’s summertime and there’s not much in the way of news. Rest assured, things will pick up after Labor Day.

Second-quarter earnings were pretty much what was expected. They mostly beat expectations, which had been pared back going into earnings season. That’s a classic Wall Street game—lower the bar until you can easily step over it. Then wait for applause. It looks like earnings fell 2.5% for Q2. If we exclude energy, then earnings rose by 1.8%. For Q3, Wall Street expects an overall earnings drop of 0.8%.

I think it’s interesting to see the growing diversion in the market’s rally. Goldman Sachs noted that stocks with weaker balance sheets have outpaced the market since the February low. That reflects the unwinding of the previous trend of favoring high-quality stocks. Since early July, the S&P 500 Dividend Aristocrats ETF (NOBL) has badly lagged the market. This is a group of blue chips that have raised their dividends every year for at least 25 years in a row. I like to use NOBL as a proxy for conservative stocks.

What we’re seeing is that investors are gradually becoming more tolerant of lower-quality names. It’s not a problem yet, but I encourage investors not to be lured by the illusion of easy gains. There’s a reason why those companies have weak balance sheets.

This week, the Federal Reserve released the minutes of its last meeting. For reasons not clear to me, the market took the minutes as evidence of a more dovish stance. I didn’t see that at all. I want to be careful not to overstate my position, but I think it’s possible that the Fed will raise rates in December or early next year. Futures traders aren’t so sure.

Now some Fed officials are moving to my side. This week, William Dudley, the top dog at the New York Fed, said there’s a chance the Fed could hike next month. I doubt that will happen, but it’s noteworthy that he said it publicly. John Williams, the head of the San Francisco Fed, went even further. He said the Fed ought to raise rates right now.

Fortunately, the inflation news continues to be favorable, but I’m not sure how much longer that will last. This week, the government said that consumer prices were flat last month. The “core rate,” which doesn’t include food and energy costs, rose by just 0.1%. The latest data indicate that workers are finally getting a wage increase, and that will work its way though the economy. For example, later on I’ll discuss the strong earnings report from Ross Stores. The deep discounter saw same-store sales grow by a healthy 4% last quarter. Ross was able to increase its operating margin.

One very favorable piece of information we got this week was a strong industrial production report. The Federal Reserve said that industrial production rose by 0.7% last month. That’s the biggest increase in nearly two years. This was especially good to see, since industrial production had sagged from November 2014 until March of this year. You can thank the strong dollar for that.

I was hesitant to say that the production slump was past us, but the last two reports have been quite good. The Fed said that industrial production rose by 0.4% in June. For July, manufacturing output rose by 0.5%. That was its biggest jump in more than a year. Now let’s take a look at this week’s Buy List earnings reports.

Hormel Foods Beat and Raised Guidance

On Thursday morning, before the opening bell, Hormel Foods (HRL) reported fiscal Q2 earnings of 36 cents per share. That beat Wall Street’s consensus by one penny per share. The Spam company’s quarterly revenues rose by 5.2% to $2.3 billion, which was a little better than expectations. This was Hormel’s 13th quarter in a row of record earnings.

I was pleased to see that Hormel had solid results across the board. Thanks to the inclusion of Applegate, Hormel’s Refrigerated Foods segment saw its profits rise by 24%. Their Jenny-O Turkey biz had a profit increase of 59%. Last year’s profits were impacted by the avian flu, so it’s nice to see a big increase here.

“We are pleased to announce exceptional results this quarter with three of our five segments delivering volume, sales and earnings growth. This is also our thirteenth consecutive quarter of record earnings, which is a testament to our balanced business model,” said Jeffrey M. Ettinger, chairman of the board and chief executive officer. “Excellent results in Refrigerated Foods were driven by the addition of the Applegate business, foodservice sales of OLD SMOKEHOUSE® bacon, HORMEL® BACON 1™ fully cooked bacon, and HORMEL® FIRE BRAISED™ meats, and retail sales of HORMEL® NATURAL CHOICE® meats. Jennie-O Turkey Store also returned to growth, posting strong double-digit sales and earnings increases,” stated Ettinger.

“Iconic brands such as SPAM® and SKIPPY® drove increased sales in our Grocery Products and International segments. We enjoyed strong growth from MUSCLE MILK® protein products led by innovative new items such as MUSCLE MILK® protein smoothies, though Specialty Foods did not show growth this quarter due to the sale of Diamond Crystal Brands,” commented Ettinger.

The best news is that Hormel is raising its full-year guidance. The old range was $1.56 to $1.60 per share. The new range is $1.60 to $1.64 per share. Shares of HRL rallied 1.9% on Thursday.

While Hormel’s stock had a great 2015, it pulled back sharply in April and May of this year. Fortunately, that rough patch appears to be over, and this earnings report should help calm any fears. Hormel Foods remains a buy up to $39 per share.

By the way, if you want to learn more about Hormel, I recommend this recent piece at Bloomberg. Whenever I tell someone I like Hormel, they invariable say, “Haha, Spam!” or worse, “Ewww, Spam!” The truth is that Hormel Foods is a great deal more than Spam.

Ross Stores Beat and Raised Guidance

Last week, I told you that “I expect to see an earnings beat” from Ross Stores (ROST). I wasn’t disappointed. After the closing bell on Thursday, the deep discounter reported fiscal Q2 earnings of 71 cents per share. That was a 13% increase over last year, and it was four cents more than expectations. They also beat their own expectation of 64 to 67 cents per share.

Looking through the report, I really like the numbers I see. Ross’s quarterly sales rose 7% to $3.181 billion, and same-store sales increased by 4%. Operating margins expanded from 13.9% to 14.4%. Maintaining margins is crucial in retail, especially for price-conscious consumers. Last quarter, Ross bought back 3.1 million shares of stock for $176 million. They plan to buy back $700 million worth of their own stock this fiscal year.

Ross’s CEO, Barbara Rentler, was confident enough to give optimistic guidance for the current quarter (fiscal Q3) and for next quarter.

Looking ahead, Ms. Rentler said, “For the third quarter ending October 29, 2016, we are forecasting a same-store sales gain of 1% to 2% on top of a 3% increase in the prior year, and earnings per share of $.52 to $.55, compared to $.53 in last year’s third quarter. For the fourth quarter ending January 28, 2017, we are also projecting same-store sales to grow 1% to 2% versus a 4% increase last year, with earnings per share expected to be $.73 to $.76, up from $.66 in the 2015 fourth quarter. Based on our first-half results and second-half guidance, fiscal 2016 earnings per share are now planned to increase 7% to 10% to $2.69 to $2.75, on top of a 14% gain last year.”

Last year, Ross Stores earned $2.51 per share, and they’re predicted to make $2.69 to $2.75 per share this year. Ross continues to be an outstanding business. This week, I’m raising my Buy Below on Ross to $67 per share.

Earnings Preview for HEICO Corp.

We have another Buy List earnings report coming next week. HEICO (HEI) is the third company on our Buy List with a quarter that ends in July. The company will report its fiscal Q3 earnings after the close on Wednesday, August 24. The conference call will come on Thursday morning.

Of all the stocks on our Buy List, HEICO is the smallest. The market cap is only about $5 billion. Wells Fargo is more than 40 times bigger, and Microsoft is nearly 100 times bigger. HEICO is also one of our quietest stocks. They rarely make the news, and most traders ignore them. You have to admit that replacement airplane parts isn’t the most exciting business.

Still, HEICO has managed to overcome this “handicap” of being a little dull by being our top performer this year. Through Thursday, HEICO is up more than 35% for us. That’s 13% more than our second-best stock.

What I like about HEICO is that it has a strong economic “moat.” That’s Warren Buffett’s phrase for a lasting competitive advantage. HEICO basically makes knock-off plane parts that are much cheaper than the originals. With lower oil prices, older airplanes have been flying longer, and that means more parts from HEICO.

The company has already raised guidance twice this year. Unfortunately, HEICO only provides guidance for net income and not earnings per share. Since the company earned $1.97 per share last time, we can infer a full-year EPS between $2.25 and $2.30 (assuming a stable number of shares). That’s seems very doable. HEICO has already earned $1.06 per share for the first half of this year. I’m expecting fiscal Q3 earnings of 60 cents per share.

Shares of HEICO are currently well above my $70 Buy Below. Don’t chase the shares. I want to see next week’s earnings report before I feel confident in adjusting our Buy Below.

That’s all for now. Next week, we’ll get reports on new- and existing-home sales (Tuesday and Wednesday). I’ll also be curious to see Thursday’s durable-goods reports. On Friday, the government will revise its report on Q2 GDP. If you recall, the initial report showed growth of just 1.2%. Also next week, the Federal Reserve holds its annual conference in Jackson Hole, WY. Be sure to keep checking the blog for daily updates. I’ll have more market analysis for you in the next issue of CWS Market Review!

– Eddy

Named by CNN/Money as the best buy-and-hold blogger, Eddy Elfenbein is the editor of Crossing Wall Street. His free Buy List has beaten the S&P 500 eight times in the last nine years. This email was sent by Eddy Elfenbein through Crossing Wall Street.
2223 Ontario Road NW, Washington, DC 20009, USA

The Olympics end, US Iran payment, tanks for sale

Good morning, Quartz readers!


The 2016 Rio Olympics take a bow. The US currently leads the pack with 95 medals, followed by the UK and China. Sunday’s closing ceremony will feature Norwegian pop star Kygo, and possibly retired Brazilian soccer legend Pelé. Brazil’s interim president, Michel Temer, who was booed at the opening ceremony, is not expected to attend.

Indonesia changes its benchmark interest rate. For the sake of efficiency, the country’s central bank will start using its seven-day repurchase rate instead of its 12-month reference rate. The change goes into effect at 12am local time on Saturday.

John Deere releases earnings. Analysts are not too optimisticabout the impact of weak commodity prices and sluggish farm income on the world’s biggest agricultural-equipment manufacture. Warren Buffett and Bill Gates both decreased their stock holdings in the company.


Viacom’s corporate drama came to an end. CEO Philippe Dauman will leave with a settlement package worth about $72 million(paywall), and the Redstone family will control the future of the $40 billion media empire. The settlement is a victory for 93-year-old mogul Sumner Redstone and his long-estranged daughter Shari Redstone, with whom he recently reconciled.

A US federal judge overturned Uber’s proposed class-action settlement with drivers. The company had been set to pay up to $100 million in reimbursement damages to nearly 400,000 drivers—who claimed they should have been classified as employees not contractors—under a settlement reached in April. The judge said the settlement (paywall) was “not fair, adequate, and reasonable.”

The US confirmed that a payment to Iran was contingent on the release of American prisoners. While insisting the $400 million in cash was not a ransom, the state department confirmed the long-frozen funds—from a decades-old arms deal—were withheld to maintain leverage over the release of the detainees.

Gap narrowly beat estimates in its second quarter. Earnings were 60 cents per share, compared to Wall Street expectations of 59 cents, suggesting some restructuring efforts are working. But same-store sales fell at its Gap and Banana Republic chains (down 3% and 9%, respectively) and stayed flat at Old Navy, while a strong US dollar hurt overseas revenue.

The US Justice Department said it will no longer use private prisons. Prison reform advocates cheered the decision, which willaffect 13 US prisons. Officials said private prisons don’t provide the same caliber of correctional services and programs.


Stocks rise, dollar
Falls. But all we talk about
Is Ryan Lochte


Ananya Bhattacharya on Asia nurturing the next generation of drone pilots. “While in the US commercial drone fliers and the FAA continually bump heads, many Asian countries have long welcomed governmental and commercial use. There, drones are making their way into a slew of commercial industries—agriculture, entertainment, law enforcement. Drones are frequently used for data collection, mapping, and tracking. In Singapore, drones even wait on tables at restaurants and bars.” Read more here.


It’s not OK to lie to your mom. Ryan Lochte’s robbery whoppershows it’s better to just fess up.

There’s no such thing as the good old days. Nostalgia has a dark side that is particularly dangerous for vulnerable groups.

Supporting gender equality means saying you’re a feminist.Standing for a cause isn’t standing against someone else, and feminism isn’t synonymous with man-bashing.


You can now buy a WWII tank. The Normandy Tank Museum isauctioning off thousands of military items, including more than 40 armored vehicles, after failing to attract enough visitors.

Bigfoot is big business. A company that investigates sightings of the creature—he’s been “seen” seven times in 45 years—was valued at $10 billion.

Sea anemones could help restore hearing. The proteins that make it possible for anemones to hear again might do the same for humans.

Rio’s Olympic swimming pool was flawed. Currents resulting from a design error may have boosted the performance of athletes in high-numbered lanes.

Algorithms are being used to tackle inequality in Africa. Data from high-resolution satellite imagery, such as which areas are lit up at night, are being used to track and predict poverty.

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World’s largest aircraft takes off, China property prices, touchpad skin

Good morning, Quartz readers!


A peek at European Central Bank discussions. Minutes from the ECB’s most recent meeting will show what its governing members thought about Brexit when they decided to leave interest rates at record lows last month.

Walmart’s summer report card. Walmart’s second-quarter earnings will indicate just how much competition from e-commerce and discount rivals is hurting the company. Analysts don’t expect any year-over-year revenue growth this quarter, but are optimistic about investments in online retail, including the company’s recent acquisition of

Fires in southern California. Evacuation orders have been issued for an area just east of Los Angeles that’s home to more than 82,000 people. Flames are raging out of control despite the efforts of some 1,300 firefighters, some of whom have described the blaze as theworst they’ve ever seen.


The world’s largest aircraft completed its maiden voyage. The helium-filled Airlander 10, after several delays, spent 20 minutes in the air above rural England. Dwarfing the Airbus A380 “superjumbo,” it’s 92 m long and 43.5 m wide (about 300 ft by 143 ft). Hybrid Air Vehicles, the company behind it, hopes to kickstart a new age of the airship.

China reported slowing growth in home prices. Nationwide theyrose 0.8% in July, the same pace as in June. But home prices fell in 16 cities, compared to 10 in June, and July was the fourth consecutive month of prices dropping in more cities. The results suggest policymakers’ efforts to quell soaring real estate values are having an effect.

Cisco announced layoffs. The California-based networking equipment company said it will let go of about 7% of its workforce,roughly 5,500 people, as it shifts its focus to software. It’s the second major tech layoff this year, after Intel in April announced plans (pdf) to lay off 12,000 people.

GlobalWafers agreed to buy SunEdison Semiconductor for $683 million. The Taiwanese company, which supplies silicon wafers to chipmakers like Toshiba and Taiwan Semiconductor Manufacturing, will gain customers and production facilities through the deal. Acquiring Missouri-based SunEdison means greater access to South Korea and the European Union.


It started with a puree and a pouch with a spout. Entrepreneur Shazi Visram was driven by a single question: why did parents feel guilty feeding their kids baby food? From a simple vision of a better baby food was born an entrepreneur’s legacy—but the journey wasn’t without its challenges. Read more about how Visram’s business grew from a simple question to a staple of thousands of households.Advertisement


The worst currency
In the world won’t go far
In Ulaanbaatar


Lynsey Chutel on how a gold-medal win in Rio turned into a race debate in South Africa. “While the term ‘coloured’ seems antiquated and cringe-worthy in some social contexts, it is still a recognizable identity and culture in South Africa. Somewhere else, Wayde van Niekerk would probably have been black. In South Africa, his racial classification remains a key identifier as he moves through the world.” Read more here.


Donald Trump’s merger with the Republican Party has failed.The nominee has abandoned any attempt at a traditional campaign.

Brazilians are a totally new type of Olympic audience. They’re rewriting the rules of fandom by finding reasons to boo anyone and everyone.

Your political rants on Facebook aren’t doing much. Some 94% of Republicans and 92% of Democrats say they’ve never been swayed by a partisan post.


The US Navy is naming a ship after a slain gay activist. TheHarvey Milk will be the first US naval vessel to be named for an openly gay leader.

The touchpad of the future will be on your skin. DuoSkin, a smart gold-leaf tattoo developed by MIT, can be used to control your phone or track yourself.

Germany’s vice chancellor gave Neo-Nazis the finger. Sigmar Gabriel responded to being called a “race traitor” over his refugee policies with the universal sign of disdain.

Holland is saying goodbye to gas-powered cars. It’s hoping to ban them from the streets within 10 years.

Eight female TV hosts in Egypt could lose their jobs if they don’t lose weight. The state broadcaster gave them a month to diet their way to an “appropriate appearance.”

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