The Argument for Higher Oil Market Prices is Fairly Straightforward
The price of oil is near its 2022 low. This lower per barrel cost is normal when the commodities market perceives the economy as slowing or that it will slow. What is surprising is that the price is near the low for the year when the Chinese are easing Covid restrictions and will soon be requiring more fuel; at the same time, a Russian oil cap, which is sure to bring less supply to the market, was just instituted this week. In the meantime, energy producers, up 60.8% on the year, are not sinking at the pace of oil prices.
Energy shares have been the big winners for 2022. And it is rare that they are flying solo, without the help of price increases of their underlying product. According to Bespoke Investment Group, last month marked the first time since 2006 that the S&P 500 energy sector has traded within 3% of a 12-month high while the price of West Texas Intermediate retreated more than 25% from its one-year peak..
The divergence has caught the attention of investors. Since drillers and miners tend to rise and fall with the prices of the commodities they produce, many expect the gap to narrow to its more historical norm. Most are looking for oil to rise rather than drillers to fall.
Pressures that could cause oil to rise include the EU winter season, the U.S. Strategic Reserves bumping up against depletion, OPEC+ keeping production quotas unchanged, and Western governments’ $60-a-barrel price cap on Russian crude. These, taken together, are expected to put upward pressure on per-barrel prices. The commodities market is not moving in accordance with these factors. Futures contracts for U.S. crude closed Monday 3.8% lower at $76.93 a barrel, its fourth-lowest settle of the year.
Working against the argument for higher crude prices is the expected slowing of world economies. The possibility of a recession in many global economies while central banks raise interest rates, is unknown. Any impact remains to be seen.
Robinhood’s One Percent Match Program is an Industry First – Can it Attract More Buy and Hold Users?
Robinhood (HOOD) has entered the IRA market and is offering a 1% match on each dollar contributed to a retirement account on its platform. For someone putting away $5,000 in a qualified account, the funds would also be credited with an additional $50. The thought on this new product is that this seemingly small amount could compound dramatically over the years into much more than the original incentive.
While Individual Retirement Accounts (Roth and Traditional) are standard brokerage offerings, Robinhood is a decidedly different animal than most. A high percentage of its 22.9 million users tend to view themselves as shorter-term traders or investors in highly speculative assets. This customer trait tends to buck the trend at other brokerage firms that see a higher percentage of assets parked in market-indexed ETFs instead of individual stocks. In one quarter of 2021, 26% of Robinhood’s revenue came from trading in Dogecoin, the cryptocurrency that started out as a goof on crypto.
Developing an account base with larger, more stable assets per account is important for the company’s development. Robinhood users generally hold less in their accounts than at other brokerage firms. Shortly before the company went public last year, the Financial Industry Regulatory Authority (FINRA) said in a report that the median Robinhood user had $240 in their account. A move toward longer-term savings that builds over time could help increase the average size. And it is important enough to the company that they decided they would compensate investors with the first-of-its-kind a matching program.
“We recognize that this is a pretty big moment for us as a company,” said Sam Nordstrom, an executive in product management at Robinhood. “Retirement is something that folks take very seriously, and we fully expect them to need to trust the institutions that help them save for retirement. So we’re looking to earn that trust over a period of time.”
What’s the IRA Match?
The Robinhood IRA Match provides an extra 1% paid by the brokerage firm. It’s not counted toward the account holders annual contribution limits and is typically available to invest immediately.
The IRA contribution limits for 2022 are $6,000 for people under age 50, which means they can earn up to $60 extra. For people age 50 and over, the limit is $7,000, which means they can earn up to $70 on top of their contributions.
Take Away
Developing a more diverse customer base by offering standard brokerage products has investment app Robinhood providing IRAs to its offerings on the platform.
In typical Robinhood style, they rolled out the offerings just before IRA season with a twist. And the twist may be just what it takes to earn new accounts and attract rollover assets from existing qualified money.
Pharma’s Expensive Gaming of the Drug Patent System is Successfully Countered by the Medicines Patent Pool, Which Increases Global Access and Rewards Innovation
Biomedical innovation reached a new era during the COVID-19 pandemic as drug development went into overdrive. But the ways that brand companies license their patented drugs grant them market monopoly, preventing other entities from making generics so they can exclusively profit. This significantly limits the reach of lifesaving drugs, especially to low- and middle-income countries, or LMICs.
This article was republished with permission from The Conversation, a news site dedicated to sharing ideas from academic experts. It represents the research-based findings and thoughts of Lucy Xiaolu Wang, Assistant Professor of Resource Economics, UMass Amherst
Drug Patents in the Global Landscape
Patents are designed to provide incentives for innovation by granting monopoly power to patent holders for a period of time, typically 20 years from the application filing date.
However, this intention is complicated by strategic patenting. For example, companies can delay the creation of generic versions of a drug by obtaining additional patents based on slight changes to its formulation or method of use, among other tactics. This “evergreens” the company’s patent portfolio without requiring substantial new investments in research and development.
Furthermore, because patents are jurisdiction-specific, patent rights granted in the U.S. do not automatically apply to other countries. Firms often obtain multiple patents covering the same drug in different countries, adapting claims based on what is patentable in each jurisdiction.
To incentivize technology transfer to low- and middle-income countries, member nations of the World Trade Organization signed the 1995 Agreement on Trade-Related Aspects of Intellectual Property Rights, or TRIPS, which set the minimum standards for intellectual property regulation. Under TRIPS, governments and generic drug manufacturers in low- and middle-income countries may infringe on or invalidate patents to bring down patented drug prices under certain conditions. Patents in LMICs were also strengthened to incentivize firms from high-income countries to invest and trade with LMICs.
The 2001 Doha Declaration clarified the scope of TRIPS, emphasizing that patent regulations should not prevent drug access during public health crises. It also allowed compulsory licensing, or the production of patented products or processes without the consent of the patent owner.
One notable example of national patent law in practice after TRIPS is Novartis’ anticancer drug imatinib (Glivec or Gleevec). In 2013, India’s Supreme Court denied Novartis’s patent application for Glivec for obviousness, meaning both experts or the general public could arrive at the invention themselves without requiring much skill or thought. The issue centered on whether new forms of known substances, in this case a crystalline form of imatinib, were too obvious to be patentable. At the time, Glivec had already been patented in 40 other countries. As a result of India’s landmark ruling, the price of Glivec dropped from 150,000 INR (about US$2,200) to 6,000 INR ($88) for one month of treatment.
Patent Challenges and Pools
Although TRIPS seeks to balance incentives for innovation with access to patented technologies, issues with patents still remain. Drug cocktails, for example, can contain multiple patented compounds, each of which can be owned by different companies. Overlapping patent rights can create a “patent thicket” that blocks commercialization. Treatments for chronic conditions that require a stable and inexpensive supply of generics also pose a challenge, as the cost burden of long-term use of patented drugs is often unaffordable for patients in low- and middle-income countries.
One solution to these drug access issues is patent pools. In contrast to the currently decentralized licensing market, where each technology owner negotiates separately with each potential licensee, a patent pool provides a “one-stop shop” where licensees can get the rights for multiple patents at the same time. This can reduce transaction costs, royalty stacking and hold-up problems in drug commercialization.
Patent pools were first used in 1856 for sewing machines and were once ubiquitous across multiple industries. Patent pools gradually disappeared after a 1945 U.S. Supreme Court decision that increased regulatory scrutiny, hindering the formation of new pools. Patent pools were later revived in the 1990s in response to licensing challenges in the information and communication technology sector.
Patent pools create a one-stop shop for multiple patients, allowing multiple licensees to enter the market. Lucy Xiaolu Wang, CC BY-NC-ND
The Medicines Patent Pool
Despite many challenges, the first patent pool created for the purpose of promoting public health formed in 2010 with support from the United Nations and Unitaid. The Medicines Patent Pool, or MPP, aims to spur generic licensing for patented drugs that treat diseases disproportionately affecting low- and middle-income countries. Initially covering only HIV drugs, the MPP later expanded to include hepatitis C and tuberculosis drugs, many medications on the World Health Organization’s essential medicines list and, most recently, COVID-19 treatments and technologies.
But how much has the MPP improved drug access?
I sought to answer this question by examining how the Medicines Patent Pool has affected generic drug distribution in low- and middle-income countries and biomedical research and development in the U.S. To analyze the MPP’s influence on expanding access to generic drugs, I collected data on drug licensing contracts, procurement, public and private patents and other economic variables from over 100 low- and middle-income countries. To analyze the MPP’s influence on pharmaceutical innovation, I examined data on new clinical trials and new drug approvals over this period. This data spanned from 2000 to 2017.
The Medicines Patent Pool works as an intermediary between branded drug companies and generic licensees, increasing access to drugs. Lucy Xiaolu Wang, CC BY-NC-ND i
I found that the MPP led to a 7% increase in the share of generic drugs supplied to LMICs. Increases were greater in countries where drugs are patented and in countries outside of sub-Saharan Africa, where baseline generic shares are lower and can benefit more from market-based licensing.
I also found that the MPP generated positive spillover effects for innovation. Firms outside the pool increased the number of trials they conducted on drug cocktails that included MPP compounds, while branded drug firms participating in the pool shifted their focus to developing new compounds. This suggests that the MPP allowed firms outside the pool to explore new and better ways to use MPP drugs, such as in new study populations or different treatment combinations, while brand name firms participating in the pool could spend more resources to develop new drugs.
The MPP was also able to lessen the burden of post-market surveillance for branded firms, allowing them to push new drugs through clinical trials while generic and other independent firms could monitor the safety and efficacy of approved drugs more cheaply.
Overall, my analysis shows the MPP effectively expanded generic access to HIV drugs in developing countries without diminishing innovation incentives. In fact, it even spurred companies to make better use of existing drugs.
Technology Licensing for COVID-19 and Beyond
Since May 2020, the Medicines Patent Pool has become a key partner of the World Health Organization COVID-19 Technology Access Pool, which works to spur equitable and affordable access to COVID-19 health products globally. The MPP has not only made licensing for COVID-19 health products more accessible to low- and middle-income countries, but also helped establish an mRNA vaccine technology transfer hub in South Africa to provide the technological training needed to develop and sell products treating COVID-19 and beyond.
Licensing COVID-19-related technologies can be complicated by the large amount of trade secrets involved in producing drugs derived from biological sources. These often require additional technology transfer beyond patents, such as manufacturing details. The MPP has also worked to communicate with brand firms, generic manufacturers and public health agencies in low- and middle-income countries to close the licensing knowledge gap.
Questions remain on how to best use licensing institutions like the MPP to increase generic drug access without hampering the incentive to innovate. But the MPP is proving that it is possible to align the interests of Big Pharma and generic manufacturers to save more lives in developing countries. In October 2022, the MPP signed a licensing agreement with Novartis for the leukemia drug nilotinib – the first time a cancer drug has come under a public health-oriented licensing agreement.
Will Russia Make the EU an Acceptable Counter Offer?
On Sunday, OPEC+ voted to maintain the previous level of output. This is known in OPEC vernacular as a “rollover,” it will allow the group time to experience and assess the market impact of the price cap of $60 a barrel on Russian oil. The $60 EU price cap is scheduled to begin Monday, December 5th.
Otherwise, it will be a quiet week in terms of data and Fed governor speeches. After a flurry of talks out of Fed executives last week, mostly pointing to a tapering of increases, the Fed is now in a blackout period until after the December 13-14 meeting and announcement.
Monday 12/5
9:45 AM ET, PMI Composite Final Consensus Outlook A little less contraction is the call for the PMI Service’s November final, at a consensus of 46.3 versus 46.1 at mid-month.
10:00 AM ET, Factory Orders are seen rising to a 0.7 percent gain in October. This would follow a 0.4 percent gain in September. The upward adjustment is in part due to Durable Goods orders for October, which have already been released and are one of two major components of this report. Durable Goods rose 1.0 percent in the month, which was stronger than expected. Factory Orders are a true leading indicator of future economic activity.
10:00 AM ET, ISM Services Industries has been slow, having reported 54.4 in October and expectations of 53.5 for November.
Tuesday 12/6
8:30 AM ET, International Trade in Goods and Services, a deficit of $80.0 billion is expected in October for total goods and services, which would compare with a $73.3 billion deficit in September. Advance data on the goods side of October’s report showed a more than $7 billion deepening in the deficit.
Wednesday 12/7
7:00 AM ET, MBA Mortgage Applications are expected to show that the composite index down 0.8%, the purchase index has gained 3.8%, and the refinance index is down 12.9%. The MBA compiles various mortgage loan indexes. The purchase applications index measures applications at mortgage lenders. This is a leading indicator for single-family home sales and housing construction, along with related industries that are impacted by a changing housing market.
8:30 AM ET, Productivity and Costs for third-quarter are expected to show non-farm productivity rising 0.4 percent versus a scant 0.3 percent annualized gain in the first estimate. Unit labor costs, which slowed from 8.9 percent in the second quarter to 3.5 percent in the first estimate for the third quarter, are expected to rise at a 3.3 percent rate in the second estimate.
10:30 AM ET, EIA Petroleum Status report. The Energy Information Administration (EIA) provides weekly information on petroleum inventories in the U.S., whether produced here or abroad. The level of inventories helps determine prices for petroleum products.
3:00 PM ET Consumer credit is expected to increase $27.3 billion in October versus a $25.0 billion increase in September. Changes in consumer credit indicate the state of consumer finances and signal future spending patterns. The report includes credit cards, vehicle loans, and student loans; mortgages are not included.
Productivity measures the growth of labor efficiency in producing the economy’s goods and services. Unit labor costs reflect the labor costs of producing each unit of output. Both are followed as indicators of future inflationary trends
Thursday 12/8
8:30 AM ET, Jobless Claims for the December 3 week are expected to come in at a 228,000 four-week moving average, versus 225,000 in the prior week. Employment is one of the Fed’s mandates; as such, any number that significantly varies from consensus could alter the market’s thinking.
10:00 AM ET, ISM Manufacturing Index was 50.2 in October; the ISM Manufacturing Index has been gradually slowing to nearly breakeven. November’s consensus is 49.9.
10:00 AM ET, Construction spending is expected to fall 0.2 percent in October. This would be dramatic relative to September’s modest 0.2 percent gain.
10:30 AM ET, The Energy Information Administration (EIA) provides weekly information on natural gas stocks in underground storage for the U.S. and five regions of the country. The level of inventories helps determine prices for natural gas products.
4:30 PM ET, The Fed’s balance sheet is a weekly report presenting a consolidated balance sheet for all 12 Reserve Banks that lists factors supplying reserves into the banking system and factors absorbing reserves from the system. The report is officially named Factors Affecting Reserve Balances, otherwise known as the “H.4.1” report; investors have taken a recent interest in this weekly report as it shows if the Fed is on track with quantitative tightening plans.
Friday 12/9
8:30 AM ET, Producer Price Index or PPI, after moderating in October, PPI is expected to rise 0.2 percent on the month in November and 7.2 percent on the year. These would compare with 0.2 and 8.0 percent in October, which were both lower than expected. When excluding food and energy, prices are expected to also rise 0.2 percent on the month and 5.9 percent on the year.
10:00 AM ET, Consumer Sentiment is expected to remain unchanged at 56.8 after a rebound in November’s final report.
10:00 AM ET, Wholesale Inventories (second estimate for October) is expected to be unchanged from the first estimate at 0.8%.
What Else
The focus until mid-month is likely to be how interest rate markets trade with a new sense that the Fed is slowing its tightening pace. Also in high focus this week, markets are expected to pay attention to how oil prices play out with the EU plan and perhaps a forthcoming Russian proposal.
Darknet Markets Generate Millions in Revenue Selling Stolen Personal Data, Supply Chain Study Finds
It is common to hear news reports about large data breaches, but what happens once your personal data is stolen? Our research shows that, like most legal commodities, stolen data products flow through a supply chain consisting of producers, wholesalers and consumers. But this supply chain involves the interconnection of multiple criminal organizations operating in illicit underground marketplaces.
The stolen data supply chain begins with producers – hackers who exploit vulnerable systems and steal sensitive information such as credit card numbers, bank account information and Social Security numbers. Next, the stolen data is advertised by wholesalers and distributors who sell the data. Finally, the data is purchased by consumers who use it to commit various forms of fraud, including fraudulent credit card transactions, identity theft and phishing attacks.
This trafficking of stolen data between producers, wholesalers and consumers is enabled by darknet markets, which are websites that resemble ordinary e-commerce websites but are accessible only using special browsers or authorization codes.
This article was republished with permission from The Conversation, a news site dedicated to sharing ideas from academic experts. It represents the research-based findings and thoughts of, Christian Jordan Howell
Assistant Professor in Cybercrime, University of South Florida and David Maimon, Professor of Criminal Justice and Criminology, Georgia State University.
We found several thousand vendors selling tens of thousands of stolen data products on 30 darknet markets. These vendors had more than US$140 million in revenue over an eight-month period.
The stolen data supply chain, from data theft to fraud. Christian Jordan Howell, CC BY-ND
Darknet Markets
Just like traditional e-commerce sites, darknet markets provide a platform for vendors to connect with potential buyers to facilitate transactions. Darknet markets, though, are notorious for the sale of illicit products. Another key distinction is that access to darknet markets requires the use of special software such as the Onion Router, or TOR, which provides security and anonymity.
Silk Road, which emerged in 2011, combined TOR and bitcoin to become the first known darknet market. The market was eventually seized in 2013, and the founder, Ross Ulbricht, was sentenced to two life sentences plus 40 years without the possibility of parole. Ulbricht’s hefty prison sentence did not appear to have the intended deterrent effect. Multiple markets emerged to fill the void and, in doing so, created a thriving ecosystem profiting from stolen personal data.
Example of a stolen data ‘product’ sold on a darknet market. Screenshot by Christian Jordan Howell, CC BY-ND
Stolen Data Ecosystem
Recognizing the role of darknet markets in trafficking stolen data, we conducted the largest systematic examination of stolen data markets that we are aware of to better understand the size and scope of this illicit online ecosystem. To do this, we first identified 30 darknet markets advertising stolen data products.
Next, we extracted information about stolen data products from the markets on a weekly basis for eight months, from Sept. 1, 2020, through April 30, 2021. We then used this information to determine the number of vendors selling stolen data products, the number of stolen data products advertised, the number of products sold and the amount of revenue generated.
In total, there were 2,158 vendors who advertised at least one of the 96,672 product listings across the 30 marketplaces. Vendors and product listings were not distributed equally across markets. On average, marketplaces had 109 unique vendor aliases and 3,222 product listings related to stolen data products. Marketplaces recorded 632,207 sales across these markets, which generated $140,337,999 in total revenue. Again, there is high variation across the markets. On average, marketplaces had 26,342 sales and generated $5,847,417 in revenue.
The size and scope of the stolen data ecosystem over an eight-month period. Christian Jordan Howell, CC BY-ND
After assessing the aggregate characteristics of the ecosystem, we analyzed each of the markets individually. In doing so, we found that a handful of markets were responsible for trafficking most of the stolen data products. The three largest markets – Apollon, WhiteHouse and Agartha – contained 58% of all vendors. The number of listings ranged from 38 to 16,296, and the total number of sales ranged from 0 to 237,512. The total revenue of markets also varied substantially during the 35-week period: It ranged from $0 to $91,582,216 for the most successful market, Agartha.
For comparison, most midsize companies operating in the U.S. earn between $10 million and $1 billion annually. Both Agartha and Cartel earned enough revenue within the 35-week period we tracked them to be characterized as midsize companies, earning $91.6 million and $32.3 million, respectively. Other markets like Aurora, DeepMart and White House were also on track to reach the revenue of a midsize company if given a full year to earn.
Our research details a thriving underground economy and illicit supply chain enabled by darknet markets. As long as data is routinely stolen, there are likely to be marketplaces for the stolen information.
These darknet markets are difficult to disrupt directly, but efforts to thwart customers of stolen data from using it offers some hope. We believe that advances in artificial intelligence can provide law enforcement agencies, financial institutions and others with information needed to prevent stolen data from being used to commit fraud. This could stop the flow of stolen data through the supply chain and disrupt the underground economy that profits from your personal data.
Employers Added 263,000 Jobs in November, How this Impacts Future Fed Decisions
There were many more jobs created and filled in the U.S. during November than expected. This may, on the surface, seem like a good thing for the economy, markets, and job seekers. But any expectation that the Fed is past the tipping point and is winning in the battle against conditions that increase prices will have to be curbed for a while.
The number of new hires points to unmet demand in filling positions, and the increase in wages directly adds to the cost of goods sold. Unmet high labor demand is inflationary and part of why the Fed is clear that it is not done.
Fed Chair Powell spoke last Wednesday in a lengthy address outlining the challenges that face the Fed and the avenues it is most likely to take. There is nothing in the strong November jobs report that alters what Powell has said. In fact, it may underscore the resiliency of the economy that the Fed is looking to temper. If you weren’t of the belief that the Fed would push Fed Funds beyond 5%, there is evidence that the Fed may need three 0.50% increases or more before it steps back.
Background
The Fed Chair and other Fed officials have reiterated in recent days that they are likely to lift rates and hold them at levels high enough to slow economic activity and hiring to bring inflation down from 40-year highs.
The just-released employment report for November was expected to come in far below the level reported. Digging even deeper into the numbers, it showed continued rampant hiring and elevated wage growth. The Fed had been hoping to keep a wage-price spiral at bay and get ahead of the supply-demand issues pushing wages and prices up.
The November Unemployment Report
The headline number showed that employers added 263,000 jobs in November while the unemployment rate held steady at 3.7%. But the revised wage data in Friday’s release could concern Fed officials because it points to an acceleration in pay gains in recent months. For the three months that ended in November, average hourly earnings rose at a 5.8% annualized rate. This is a surprising increase from an initially reported 3.9% annualized rate for the three months that ended in October. Economists had expected the U.S. economy had gained 200,000 jobs last month.
At the same time, senior Fed officials have made sure it is no surprise if they lessen the size of rate increases in coming meetings. The next FOMC is the Dec. 13-14 meeting; the Fed is expected to move 0.50% rather than another 0.75%.
Most major stock market indices have traded lower, taking a bearish tone from the report and signs the Fed still is a little behind in its effort to squelch inflation-feeding activity.
Of interest to investors, the sectors with the most job gains were the leisure and hospitality and healthcare industries, both of which had been hard hit during the pandemic, and in government, where employment levels are still 2% below where they stood in February 2020.
Take Away
“To be clear, strong wage growth is a good thing,” Powell said this week. “But for wage growth to be sustainable, it needs to be consistent with 2% inflation.”
The accelerated pace of job growth in November, coupled with upwardly revised October statistics, makes clear to the markets the persistent challenge facing the Federal Reserve. The central bank has repeated that it needs to see some slack in the labor market in order for inflation to fall. This could come from reduced labor demand or increased labor supply, or both.
Patients Suffering with Hard-to-Treat Depression May Get Relief from Noninvasive Magnetic Brain Stimulation
Not only is depression a debilitating disease, but it is also widespread. Approximately 20 million adult Americans experience at least one episode of depression per year.
Millions of them take medication to treat their depression. But for many, the medications don’t work: Either they have minimal or no effect, or the side effects are intolerable. These patients have what is called treatment-resistant depression.
One promising treatment for such patients is a type of brain stimulation therapy called transcranial magnetic stimulation.
This treatment is not new; it has been around since 1995. The U.S. Food and Drug Administration cleared transcranial magnetic stimulation in 2008 for adults with “non-psychotic treatment-resistant depression,” which is typically defined as a failure to respond to two or more antidepressant medications. More recently, in 2018, the FDA cleared it for some patients with obsessive-compulsive disorder and smoking cessation.
Insurance generally covers these treatments. Both the psychiatrist and the equipment operator must be certified. While the treatment has been available for years, the equipment to perform the procedure remains expensive enough that few private psychiatry practices can afford it. But with the growing recognition of the potential of transcranial magnetic stimulation, the price will likely eventually come down and access will be greatly expanded.
Does it Work?
Transcranial magnetic stimulation is a noninvasive, pain-free procedure that has minimal to no side effects, and it often works. Research shows that 58% of once treatment-resistant patients experience a significant reduction in depression following four to six rounds of the therapy. More than 40 independent clinical trials – with more than 2,000 patients worldwide – have demonstrated that repetitive transcranial magnetic stimulation is an effective therapy for the treatment of resistant major depression.
This article was republished with permission from The Conversation, a news site dedicated to sharing ideas from academic experts. It represents the research-based findings and thoughts of Patricia Junquera, Associate Professor and Vice Chair of Clinical Services, Florida International University.
As a professor and psychiatrist who has used transcranial magnetic stimulation to treat some of my patients, I have seen depression symptoms decrease even within the first two weeks of treatment. What’s more, the effects continue after the treatment has ended, typically for six months to a year. After that, the patient has the option of maintenance treatment.
About the Procedure
For the patient, the procedure is easy and simple. One sits in a comfortable chair with a snug pillow that holds their head in place, puts on earplugs and can then relax, check their phone, watch TV or read a book.
A treatment coil, which looks like a figure 8, is placed on the patient’s head. A nearby stimulator sends an electrical current to the coil, which transforms the current into a magnetic field.
The field, which is highly concentrated, turns on and off rapidly while targeting a portion of the prefrontal cortex – the area of the brain responsible for mood regulation.
Researchers know that people suffering from depression have reduced blood flow and less activity in that part of the brain. Transcranial magnetic stimulation causes increases in both blood flow and in the levels of dopamine and glutamate – two neurotransmitters that are responsible for brain functions like concentration, memory and sleep. It’s the repeated stimulation of this area – the “depression circuit” of the brain – that brings the antidepressant effect.
It is Not ‘Electroshock’ or Deep Brain Stimulation
Some people confuse transcranial magnetic stimulation with electroconvulsive therapy, a procedure used for patients with severe depression or catatonia. With electroshock therapy, the anesthetized patient receives a direct electrical current, which causes a seizure. Typically, people who undergo this procedure experience some memory loss after treatment.
Transcranial magnetic stimulation is very different. It doesn’t require anesthesia, and it doesn’t affect memory. The patient can resume daily activities right after each treatment. Dormant brain connections are reignited without causing a seizure.
It should also not be confused with deep brain stimulation, which is a surgical procedure used to treat obsessive-compulsive disorder, tremors, epilepsy and Parkinson’s disease.
Side Effects and Access
Transcranial magnetic stimulation patients undergo a total of 36 treatments, at 19 minutes each, for three to six weeks. Research has concluded that this is the best protocol for treatment. Some patients report that it feels like someone is tapping on their head. Others don’t feel anything.
Some very minor side effects may occur. The most common is facial twitching and scalp discomfort during treatment, sensations that go away after the session ends. Some patients report a mild headache or discomfort at the application site. Depending on how effective the therapy was, some patients return for follow-ups every few weeks or months. It can be used in addition to medications, or with no medication at all.
Not everyone with depression can undergo this type of brain stimulation therapy. Those with epilepsy or a history of head injury may not qualify. People with metallic fillings in their teeth are OK for treatment, but others with implanted, nonremovable metallic devices in or around the head are not. Those with pacemakers, defibrillators and vagus nerve stimulators may also not qualify, because the magnetic force of the treatment coil may dislodge these devices and cause severe pain or injury.
But for those who are able to use the therapy, the results can be remarkable. For me, it is amazing to see these patients smile again – and come out on the other side feeling hopeful.
“By Any Standard Inflation Remains Much Too High,” Says Powell
The Federal Reserve has a blackout period for its governors. It begins the second Saturday preceding an FOMC meeting. During this period the members cannot give any sort of public address on topics that will be under consideration at the Committee meeting. Today, Fed Chair Powell gave an address titled, Inflation and the Labor Market. These are the two missions of the Fed. This address may be the last the markets hear from Powell until after the December 14th FOMC session.
The stock and bond markets were hoping to hear that the Fed will be backing off significantly. Instead, what was delivered by Powell was more consistent with his previous talks which don’t back away from full commitment to bringing down prices. Although he did suggest that they have covered the bulk of the ground, they will need to.
Current Status
Powell referred to the address given on the last day of November 2022 as a “progress report on the Federal Open Market Committee’s (FOMC) efforts to restore price stability to the U.S. economy for the benefit of the American people.” The report made mention several times that a healthy economy with ample job growth consistent with inflation targets is consistent with low price inflation. In fact Powell lead with the words, “the report must begin by acknowledging the reality that inflation remains far too high.”
Powell said that he and other Fed governors are “acutely aware that high inflation is imposing significant hardship, straining budgets and shrinking what paychecks will buy.” He continued, “price stability is the responsibility of the Federal Reserve and serves as the bedrock of our economy. Without price stability, the economy does not work for anyone. In particular, without price stability, we will not achieve a sustained period of strong labor market conditions that benefit all.”
Inflation
Powell said that 12-month personal consumption expenditures (PCE) inflation through October ran at 6.0 percent (figure 1). While October inflation data received so far showed a welcome surprise to the downside. He cautioned that “these are a single month’s data, which followed upside surprises over the previous two months. As figure 1 makes clear, down months in the data have often been followed by renewed increases.” Powell said. He reminded that, “it will take substantially more evidence to give comfort that inflation is actually declining. By any standard, inflation remains much too high.”
In order to reach the Fed’s goal, Powell says they need to raise interest rates to a sufficiently restrictive level to return inflation to 2 percent. He relents that there is considerable uncertainty about what rate will be sufficient. Although he says they are much closer now than at the beginning of the year.
Powell said of himself and his associates, “we are tightening the stance of policy in order to slow growth in aggregate demand. Slowing demand growth should allow supply to catch up with demand and restore the balance that will yield stable prices over time. Restoring that balance is likely to require a sustained period of below-trend growth.”
Housing Prices
The rise in the price of all rents and the rise in the rental-equivalent cost of owner-occupied housing is called housing services inflation. Unlike goods inflation, housing services inflation has continued to rise and now stands at 7.1 percent over the past 12 months, according to Powell. Housing inflation tends to lag other prices around inflation turning points, but because of the slow rate at which the stock of rental leases turns over. The market rate on new leases is a timelier indicator of where overall housing inflation will go over the next year or so. Measures of 12-month inflation in new leases rose to nearly 20 percent during the pandemic but have been falling sharply since about midyear (figure 3).
As the above chart shows, overall housing services inflation has continued to rise as existing leases turn over and jump in price to catch up with the higher level of rents for new leases. Powell thinks this is likely to continue well into next year. But as long as new lease inflation keeps falling, we would expect housing services inflation to begin falling sometime next year. Importantly, a decline in this inflation underlies most forecasts of declining inflation.
Labor costs is the largest of the three inflation categories covered in Powell’s address. It represents more than half of the core PCE index. Powell used it to explain the future evolution of core inflation.
Chair Powell said, “ [the] demand for workers far exceeds the supply of available workers, and nominal wages have been growing at a pace well above what would be consistent with 2 percent inflation over time. Thus, another condition we are looking for is the restoration of balance between supply and demand in the labor market.”
The Fed Chair said some of the labor force participation gap can be explained as workers who are still out of the labor force because of Covid related issues. But recent research by Fed economists finds that the participation gap is now mostly due to excess retirements—that is, retirements in excess of what would have been expected from population aging alone.
Economic Conditions Summed Up
In order to bring inflation down to 2%, the Fed Chair said he was happy that growth in economic activity has slowed. Also that bottlenecks in goods production are easing and goods price inflation appears to be easing as well. Housing services inflation will probably keep rising well into next year, but if inflation on new leases continues to fall, we will likely see housing services inflation begin to fall later next year. Finally, the labor market, which is especially important for inflation in core services ex housing, shows only tentative signs of rebalancing, and wage growth remains well above levels that would be consistent with 2 percent inflation over time. Despite some promising developments, we have a long way to go in restoring price stability.
Monetary Policy
Powell said in his address, “returning to monetary policy, my FOMC colleagues and I are strongly committed to restoring price stability. After our November meeting, we noted that we anticipated that ongoing rate increases will be appropriate in order to attain a policy stance that is sufficiently restrictive to move inflation down to 2 percent over time.”
He admitted that monetary policy affects the economy and inflation with uncertain lags, and the full effects of rapid tightening are yet to be felt. With this, he says it makes sense to moderate the pace of the rate increases.
Powell said, “The time for moderating the pace of rate increases may come as soon as the December meeting. Given our progress in tightening policy, the timing of that moderation is far less significant than the questions of how much further we will need to raise rates to control inflation and the length of time it will be necessary to hold policy at a restrictive level. It is likely that restoring price stability will require holding policy at a restrictive level for some time. History cautions strongly against prematurely loosening policy. We will stay the course until the job is done.”
The Odds May Again be Stacked on the Side of a Prolonged Oil Price Rally
Oil markets and the related energy industry have been cheered this year as the one clear winner, yet within the past few days, crude has brushed up against its low recorded at the start of 2022. The commodity has since bounced, and there are at least four reasons to believe that it will continue to rally.
On Wednesday, November 30, news that China will take steps to ease lockdown restrictions, a drop in U.S. oil supplies, a weaker U.S. dollar, and a signal of OPEC+’s intentions helped push crude prices up by more than 3.5%.
China
Major Chinese manufacturing cities are lifting Covid lockdowns, including the financial hub Shanghai and Zhengzhou (the location of the world’s largest iPhone factory). Renewed expectations that China’s economy may strengthen after being held back by restrictions on movement to contain Covid-19 helped lift prices. After lockdown protests last weekend, Chinese authorities reported fewer cases of the virus on Tuesday. Guangzhou, a city in the south of the country, relaxed some rules on Wednesday. Increased economic activity in China could come at a pace that dramatically increases the demand for oil and related products.
US Supply
U.S. petroleum stockpiles declined by 7.9 million barrels last week, according to reports from the American Petroleum Institute. Official figures from the U.S. Energy Information Administration (EIA) shown below indicate a declining trend that is unsustainable and will soon need to be turned around.
Source: EIA
The decline in the days supply is effectively borrowing against future stockpiles as there will need to be a time when this reverses, and more output-increasing stockpiles will add to demand on production.
U.S. Dollar
A weakening dollar has also helped enhance demand globally for crude by making contracts priced in the U.S. currency more affordable for overseas buyers. The dollar index, a measure of strength against a basket of six other major trading currencies, slipped 0.3% on Wednesday. It’s down about 5% in the past month.
While the effect of this FX change may not be felt by U.S. buyers, the added demand by requiring less local currency to translate into dollars effectively creates demand by virtue of its lower cost.
Source: Koyfin
OPEC+
The Saudis had been considering increasing their output to help soften price pressures and increase availability. This would occur when the cartel meets this weekend to decide output levels. It is reported that the meeting will not be in-person. When OPEC+ agrees to meet virtually, it tends to indicate they are not discussing any major changes to output targets.
Expectations of an increase in output had been built into the price; the new expectations are putting upward pressure on crude.
Take Away
A number of factors have caused crude to trade off since late Spring. A number of forces are now stacked up that could push crude levels back upward. These include fewer lockdowns in China, a declining U.S. supply, the added global demand that will be attracted by a weakening dollar, and the new realization that members of OPEC+ are not likely to increase output limits. Additionally, there has been a looming concern as to how much supply will be taken offline with price limits that are to be placed on purchases of Russian oil early next week.
World Cup 2022: How Sponsorship has Become Less About Selling Drinks and More About Geopolitics
The Fifa men’s World Cup 2022 in Qatar is arguably the most political in history.
Even during the seemingly innocuous performance of South Korean pop star Jung Kook at the tournament’s opening ceremony, geopolitics were center stage. For Kook, 25, is not just a good-looking young man with a global fan base and a multi-million dollar fortune. In addition, he has a lucrative endorsement deal with the South Korean car maker Hyundai-Kia, which also happens to be a major Fifa sponsor.
This kind of relationship is neither an accident nor a simple business arrangement. For years, the South Korean government has been pursuing a strategy aimed at building and projecting “soft power”, developing its engagement with target audiences around the world. This has happened not just through football, music and cars, but also through Oscar winning films like Parasite and the massively popular TV series Squid Games.
And it’s not just South Korea taking advantage of the audiences that Fifa can provide. For while sellers of soft drinks and burgers are still part of the sponsorship roster, Fifa’s key partners are increasingly big corporations from countries keen to benefit from the global reach of football.
State-owned Qatar Airways for example, is busy selling plane tickets as Fifa’s official airline partner, but also plays a pivotal role in attempts by the Qatari government to establish Hamad International Airport as a major hub of global travel.
The award winning airline is an effective instrument of soft power, transmitting signals to global audiences about what Qatar is and what it aspires to be. In turn, the airline, and the very act of hosting the 2022 World Cup, are both illustrations of a nation intent on telling the world a particular story about itself – that it is a legitimate, trustworthy and important member of the international community.
The same applies to China, even though sporting and industrial progress have stalled somewhat since the pandemic. Its roster of four key World Cup sponsors featuring electronics (Hisense), mobile phones (Vivo), dairy products (Mengiu) and everything from property to media (Wanda) remains significant for a country hopeful of one day staging the tournament itself and a government keen to spread China’s influence around the world.
Rebels With a Cause
Alongside the World Cup’s main sponsors, a tradition has emerged of business competitors during tournament engaging in “ambush” marketing. This involves brands using the mega-event as a marketing tool without the considerable expense of an official link (Fifa is reportedly charging around US$100 million (£82 million) for a four-year sponsorship deal).
One notably successful ambush was perpetrated by Bavaria Beer’s provocative campaigns at the 2006 World Cup in Germany and again in 2010 in South Africa. These stunts involved equipping spectators with branded clothing, which was smuggled into stadiums. This gained huge global attention which was no doubt frustrating for the tournaments’ “official” beer, Budweiser.
Brightly colored ambush in 2010. EPA/STR
Yet even ambush marketing now appears to have become geopoliticised. For instance, during this World Cup, the authorities in nearby Dubai have been trying to draw attention away from Qatar with a tourism campaign featuring international football stars. The rival emirate will also be staging its own football tournament at the same time as the World Cup, featuring the likes of Liverpool, AC Milan and Arsenal.
And while in 2010, Bavaria Beer used women wearing orange dresses in its ambush, the UK-based brewer and pub chain BrewDog is trying to get in on this year’s action with its strident anti-World Cup marketing campaign.
Through a series of provocative billboards (in the UK), BrewDog is using references to autocracy, human rights abuses and corruption, all targeted at beer drinkers perturbed about Qatar’s staging of football’s biggest global event. While the bottom-line remains the same for BrewDog – to make a profit by selling beer – it is nevertheless contributing to the transformation of advertising and sponsorship from simple marketing to geopolitical posturing.
In a similar way, apparel brand Hummel has decided to hide its name and logos and the Danish football association’s badge from its kit. This is in protest against the treatment of migrant workers in Qatar and in support of LGBTQ+ communities.
In the company’s mission statement, Hummel emphasises its commitment to “Danishness” – and indeed, Denmark has been highly vocal in its condemnation of Qatar. Whenever the national team takes to the field, it will be in shirts that directly challenge the World Cup hosts.
So Qatar’s expensive ambitions in staging this tournament have come up against criticism and protest from countries and corporations alike. In 2022 it seems that football sponsorship is no longer just for kicks, or even customers. Everywhere you look, there are geopolitical points to be scored.
This article was republished with permission from The Conversation, a news site dedicated to sharing ideas from academic experts. It represents the research-based findings and thoughts of Simon Chadwick, Professor of Sport and Geopolitical Economy, SKEMA Business School.
Is it Better to Shadow Trade Insiders Rather than Congress Members or Fund Managers?
As tricky as the overall market has been, a new crop of investors that had been primarily index investors have spent the past 11 months gravitating more toward creating their own diversified mix of above-average probability stocks. One proven way to put the odds more on your side as a self-directed investor is to watch trends in insider buying. It was Peter Lynch of Magellan Fund fame who said, “Insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.” To be sure, management only has so much control over performance, but they are likely to have greater clarity than anyone else evaluating their company.
Why Shadow Insiders?
Following insiders into stocks you otherwise are positive about is a form of shadow investing. Shadowing successful investors is a growing trend. There are websites dedicated to highlighting the transactions of investors like Paul Pelosi, Warren Buffett, Michael Burry, Cathie Wood, and others. But shadowing directors or key executives of publicly traded companies provides investors with much more current information – SEC Form 4 is used to disclose a transaction in company stock within two days of the purchase or sale. Compare the two-day reporting to institutional funds managing over $100 million that report 45 or more days after quarter-end on quarter-end holdings using SEC Form 13F. Or Congress-persons that can wait 45 days after a transaction to report it. Moreover, the insider is generally restricted to trading windows, so their holding time tends to be longer term. So their commitment level may be much higher than say a hedge fund manager like Michael Burry that may have purchased a security just before his 13F statement date, and then sold it a week later.
And the performance is above average. University of Michigan finance professor Nejat Seyhun, the author of “Investment Intelligence from Insider Trading” wrote stock prices rise more after insiders’ net purchases than after net sales. On the whole, insiders do earn profits from their legal trading activities, and their returns are greater than those of the overall market.
Current Example
I thought to write about following legal insider buying of stocks on your watch list after a link to a research note posted on Channelchek appeared in my inbox. It was on a company I follow and it highlighted legal insider trading by an executive. The report, available here, reported that the CEO of an expanding company in the cannabis sector name Schwazze (Medicine Man Technologies), was adding substantially to his ownership of the company he runs. The note by Noble Capital Markets Sr. Research Analyst, Joe Gomes, said:
“In a series of Form 4 filings, between November 14th and November 23rd Schwazze CEO Justin Dye purchased 1,325,852 SHWZ shares at a cost of $2.36 million, or a per share average of $1.78. According to the most recent Form 4 filed on November 25th, Mr. Dye directly currently owns 1,368,062 SHWZ common shares and indirectly owns 9,287,500 SHWZ common shares through Dye Capital & Company.”
How Do You Screen and Watch for Insider Buying Activity?
There are websites such as SECForm4.com and InsiderMonkey.com that aggregate SEC Form 4 filings and post them in a searchable, fully filterable online environment so you may search for characteristics you may prefer in your stock selections. While using insider activity, whether it be raw from the SEC or served up on online screening tools, here are four things to keep in mind to help hone your skills.
Some insiders are better than others. As a rule, directors tend to know less about a company’s outlook than top executives. Key executives are the CEO and CFO. The people day-to-day running the company are better able to assess risk of an investment in their company.
More insiders are better than a few. If one insider is buying in unusual amounts, it is a green flag to dig deeper. If several have begun adding to their holdings, it can be seen as a stronger signal.
People at small companies may have more insight. At smaller companies, a higher percentage of insiders are privy to company plans, changes in strategy, and financials. At big corporations, information is more dispersed, and typically only the core management team has the big picture.
Stay the course. Insiders tend to act far in advance of expected news. This is in part because of trading windows and also to avoid the appearance of illegal insider trading. A study by academics at Pennsylvania State and Michigan State contends that insider activity precedes specific company news by as long as two years before the eventual disclosure of the news.
Take Away
Insider tracking takes some work, but the resources to monitor a list of stocks you are interested in do exist to make it easier. Investors that would prefer to build their own diversified portfolio rather than own an index fund may find that watching insider buys helps point the way toward stocks more likely to beat a particular index. Another Peter Lynch quote says, “Know what you own, and why you own it.” Following insider buying allows you to have a methodology where you do know exactly why you are in a position. And although I have no hard data, I’d guess over the past five years it has paid better to follow insiders’ reported trades rather than social media influencers’ suggestions for a trade.
Retailers May See More Red After Black Friday as Consumers Say They Plan to Pull Back on Spending
Retailers are gearing up for another blockbuster holiday shopping season, but consumers burned by the highest inflation in a generation may have other ideas.
Industry groups are predicting another record year of retail sales, with the National Retail Federation forecasting a jump of 6% to 8% over the US$890 billion consumers spent online and in stores in November and December of 2021.
But Jeff Bezos, founder and chairman of the biggest retailer of them all, seems to be anticipating a much less festive holiday for businesses. In November 2022, Amazon said it is laying off 10,000 workers, one of several big companies announcing job cuts recently. Bezos even cautioned consumers to hold off on big purchases like cars, televisions and appliances to save in case of a recession in 2023.
This article was republished with permission from The Conversation, a news site dedicated to sharing ideas from academic experts. It represents the research-based findings and thoughts ofAyalla A. Ruvio, Associate Professor of Marketing and the Director of the MS of Marketing Research program, Michigan State University and Forrest Morgeson, Assistant Professor of Marketing, Michigan State University.
Results from our new survey suggest consumers appear to be already taking Bezos’ advice, as a combination of soaring consumer prices, rising borrowing costs and growing odds of a recession weighs on their wallets. And if our survey results do pan out, it may mean the recession everyone’s worried about happens sooner than expected.
Crisis Behaviors
We conducted our survey in mid-November, about a week before Black Friday, the historical start of the holiday shopping season. The day after Thanksgiving is known as Black Friday because it signals the period when retailers hope to sell enough goods so that their income statement shows “black,” or profit, for the year rather than “red,” which refers to losses.
We asked over 500 consumers a series of questions about their spending plans, concerns and priorities during this year’s holiday season. Participants were split evenly between men and women, and almost two-thirds had a household income of $70,000 or less.
Overall, the most alarming conclusion from our research is that consumers are reporting consumption behaviors typically exhibited during an economic crisis, similar to those observed in 2009 by consultancy McKinsey during the Great Recession.
One data point stands out: An overwhelming 62% said they were concerned about their job security, while almost 35% indicated they were “very” or “extremely” worried about their financial situation.
Here are three behaviors we found in our survey that suggest consumers are behaving as if the U.S. economy is already in a recession.
1. Spending Less
Not surprisingly, cutting spending is the first thing consumers do during economic turmoil.
A study by McKinsey in early 2009 found that 90% of U.S. households cut spending due to the Great Recession, with 33% of consumers indicating a significant cut.
Similarly, respondents to our survey said they plan to spend, on average, around $700 this holiday season, substantially lower than the roughly $880 consumers spent during each of the past three seasons – including early in the pandemic in 2020.
About a third of our sample intended to spend “slightly” or “much” less than in 2021, while 35% said they would spend “about the same” – which from a retailer’s perspective means spending less because last year’s dollars don’t go as far today. The rest said they planned to spend a little or much more.
Inflation is one of the key reasons consumers say they are spending less. Almost 80% of respondents said they are either moderately, very or extremely concerned about the surge in prices, and 87% said those concerns would affect their holiday spending behavior, such as by buying gifts for fewer people or purchasing less expensive items.
Some of our respondents even said they were planning to make their own gifts or buy used goods, rather than shop for new items. The secondhand market has boomed in the last few years, and many shoppers view this option as a way to combat inflationary pressures.
2. Planning Ahead
Another thing consumers do when they sense a troubled economy is they plan their purchases more carefully and maintain self-control over spending.
Common strategies include spending more time searching for the best deals, adhering to strict shopping lists, prioritizing necessities and making purchases earlier to spread out their spending – all of which were mentioned by our survey respondents.
We may already be seeing signs of this last strategy. Retail sales for October were up 1.3% from the previous month and up 8.3% from October 2021, which may reflect consumers’ early holiday shopping. If that is the case, this early shopping may result in slumping sales in December.
Also, purchasing early, aided by the plethora of steep discounts offered well in advance of Black Friday, allows consumers to control their shopping behavior better and reduces the risk of impulse buying. Reduction of impulse buying is a strong indicator that consumers are shopping like the economy is in recession.
In our survey, we found that over 50% of participants said that they would be using savings to cover the cost of holiday spending, with many stressing that they would pay with cash. Using cash as a primary form of payment is the main tool consumers have to control spending.
Only 15% of our respondents said that they would use buy-now-pay-later options, which to us is another sign that consumers are preferring cash over forms of credit that creates a new debt.
3. Hypersensitivity to Price
During economic crises, consumers become hypersensitive to prices, which trump most other considerations in the minds of consumers.
A whopping 90% of our respondents confirmed that price is their major consideration when shopping during the holidays this year. Other elements of price sensitivity are free shipping, product value and the level of discount, if any.
The singular focus of consumers on price gives retailers a wide range of potential responses, including promoting house brands and private labels that are perceived as having greater value for money. In fact, according to the 2009 McKinsey report, one of the biggest shifts in consumer behavior during and after the 2008 recession was the switch in preference from high-priced premium brands to value brands that tend to have lower prices but still decent quality. During an economic slowdown, consumers typically stop buying brands they are not strongly connected with or loyal to.
Consumers in our survey said buying brand names will be one of the least important influences on their purchases this season.
While economists debate whether a recession is coming, or even whether the U.S. is already in one, our data suggests consumers are beginning to behave like one is already here. That risks becoming a self-fulfilling prophecy as consumers tighten their belts.
Roadshows Help Investors Truly Understand a Company’s Prospects
Around the office, we debate whether Roadshow should be one word or two. We’ll never all agree, but we do all know that an investor that strives to be diligent in understanding companies in which they may invest, would likely benefit from attending an available management roadshow.
If you aren’t familiar, a roadshow is usually a series of meetings in various locations where the management of a company with either outstanding securities or undergoing an initial public offering (IPO), makes themselves available to investors in a presentation format. Each meeting’s presentation will typically include its business model, current performance, and future potential, along with competitive advantage. When an event like this is available with a company an investor would consider, there may be no better supplement to the investor’s other research than to sit with management and be able to hear from the person at the helm what their expectations are, and the biggest risk to those expectations.
Roadshows are typically organized by a financial firm that has a relationship with the company. In an IPO, this may be the firm bringing them public; for a debt issue, it may be the underwriter. For issuers already public with current outstanding securities, the introducing firm may have a relationship with the company where they are looking to bring more awareness to the opportunity.
Roadshow Events
Potential investors ask to be invited to attend a roadshow, then gather and listen to the management presentations and participate in the question/answer period. This could occur in a private room at restaurant, over cocktails, in a company office, or basically any other forum where a clear picture of the company can be conveyed and the attendees can get the information they need to understand the opportunity.
As the purpose is to get in front of and increase investor awareness, these presentations are most often held in cities that help allow maximum motivated investor participation. Technology has ushered in an increase in roadshows that are now held virtually. This allows for a broader audience in faraway locations. Smaller investors that have never been to a roadshow should not be shy in asking for a determination if they meet the expected investor level, to attend. Often times companies actually prefer to be broadly traded by many small investors than to have a few large shareholders.
Channelchek’s Involvement
The ongoing mission of Channelchek is to provide actionable ideas and quality equity research to investors in small and microcap companies. Along with Noble Capital Markets, we hold ongoing Meet the Management investor meetings with companies with interesting stories and prospects. These roadshows are often in person and at times online. To see if a company you may be interested in will be meeting in your town, click here for the current list of Channelchek/Noble Capital Markets roadshows.
