Thursday, June 29, 2017

Millennials are flocking towards some of the most speculative ways to invest

Millennials are flocking towards some of the most speculative ways to invest

Magician trading floorReuters/Kai Pfaffenbach
Millennials are big users of some of the most speculative investing instruments in the stock market, according to TD Ameritrade.
The brokerage firm told Business Insider that the roughly 18-35-year-old demographic made up about 40% of its new customers. Almost half of their trades came from mobile devices, said Victor Jones, the director of trading at TD Ameritrade. 
"Trades from mobile tend to be more futures-based," Jones said. "More people are gravitating towards derivatives like options and futures." 
"When you have your phone on you, you're available to look at the markets 24/7, but the markets aren't open 24/7," Jones said. "Futures give millennials or any investor the opportunity to participate in the market 24/7."
Instead of buying a specific asset class like a company's stock or a currency, futures and options contracts allow traders to profit from their bets on future prices and to hedge losses on what they already own.
Jones doesn't see mobile trading as the reason why more people are moving towards derivatives that aren't tied to the 9:30 a.m. to 4 p.m. ET stock-market schedule.
More investors — millennial and older — understand they can use these instruments to manage portfolio risks, Jones said. Derivatives trading made up about 45% of TD Ameritrade's transactions, he said, up from about 10% in 2009.
"They're gravitating towards the trading strategies that can help them limit their risk, limit their capital exposure, and generate additional yield on the portfolio," Jones said. 
Coincidentally, Interactive Brokers had captured this in a TV commercial in which a woman interrupts her dinner with a man to "do some hedging trades" on her phone because global markets are crashing after Russia downed a NATO plane.  
Even as derivatives trading may demonstrate a certain sophistication among millennial traders, it could also reflect their outsized stomach for risk, since they have a longer runway to earn returns from the market. A TD Ameritrade spokesperson said the most popular options strategies included covered calls, through which a trader can hedge on a long position in an asset. The options education page was consistently among the firm's top-five most visited, she added.
"I agree that derivatives do have unique risk characteristics," Jones said. "We are passionate about ensuring that our clients are aware of the unique risk characteristics."

Consumer-goods giant Unilever has been hiring employees using brain games and artificial intelligence — and it's a huge success

Consumer-goods giant Unilever has been hiring employees using brain games and artificial intelligence — and it's a huge success

hirevue faceUnilever wants to be a global leader when it comes to using artificial intelligence for hiring. HireVue
• Unilever has used artificial intelligence to screen all entry-level employees for the past year.
• Candidates play neuroscience-based games to measure inherent traits, then have recorded interviews analyzed by AI.
• The company considers the experiment a big success and will continue it indefinitely.
For the past year, the Dutch-British consumer-goods giant Unilever has been using artificial intelligence to hire entry-level employees, and the company says it has dramatically increased diversity and cost-efficiency.
"We were going to campus the same way I was recruited over 20 years ago," Mike Clementi, VP of human resources for North America, told Business Insider. "Inherently, something didn't feel right."
Unilever is one of the world's leading consumer-goods conglomerates, with billion-dollar brands like Axe, Dove, and Lipton, and it has 170,000 employees worldwide. Clementi said the company needed to find a way to rejuvenate itself, and transforming new talent recruitment was one way to do so.
Instead of sending representatives to elite universities, collecting résumés, and arranging follow-up phone interviews for the students who stuck out, Unilever has partnered with the digital HR service providers Pymetrics and HireVue to digitize the first steps of the process. If candidates pass the AI screening, they go through an in-person screening that determines whether they get the job.
Candidates learn about the jobs online through outlets like Facebook or LinkedIn and submit their LinkedIn profiles — no résumé required. They then spend about 20 minutes playing 12 neuroscience-based games on the Pymetrics platform. If their results match the required profile of a certain position, they move on to an interview via HireVue, where they record responses to preset interview questions. The technology analyzes things like keywords, intonation, and body language, and makes notes on them for the hiring manager. All of this can be completed on a smartphone or tablet.
If the candidate makes it through these two steps, they are invited to a Unilever office to go through a day-in-the-life scenario. By the end of the day, a manager will decide whether they are the right fit for the job.
The hiring overhaul began with Unilever North America and took effect in 68 countries, was conducted in 15 languages, and involved a total of 250,000 applicants. Unilever shared its North American results, from July 2016 to June 2017:
• Applications to jobs doubled within the first 90 days of their posting year-over-year, to 30,000 applicants from 15,000.
• Unilever hired its "most diverse class to date." There was a "significant" increase in hires of nonwhite applicants and an increase in universities represented, to 2,600 from 840. Unilever said the socioeconomic representation of its new hires was less top-heavy, but it did not say by how much. And there was gender parity among hires, which was virtually unchanged year-over-year.
• The average time for a candidate to be hired went from four months to four weeks, saving a cumulative 50,000 hours of candidates' time. Recruiters' time spent reviewing applications decreased by 75%.
• The rate of offers to candidates who made it to the final round increased to 80% from 63%, and the acceptance rate of these offers increased to 82% from 64%.
• The completion rate of the 12 Pymetrics games was 98%. The average score of the overall process was 4.1 out of 5, based on the 25,000 applicants who took a survey.

What the process looks like

Step 1: Submit LinkedIn

Candidates can find job listings on Unilever's website, but college seniors are also targeted with job postings on Facebook, LinkedIn, The Muse, and WayUp in lieu of college visits. They then submit the link to their LinkedIn profile.

Step 2: Play neuroscience games

Pymetrics CEO Frida Polli, who founded the company with Julie Yoo in 2013, said the 12 games were "essentially the gold standard of cognitive neuroscience" in that they're based on tests that those in the field have long employed.
Games test traits like ability to focus, memory, relationship to risk, and ability to read emotional versus contextual cues. For example, the game that tests risk gives users three minutes to collect as much "money" as possible using this system: clicking "pump" inflates a balloon by 5 cents; at any point, the user can click "collect money"; and if the balloon pops, the user receives no money. The user is presented with balloons until the timer runs out.
pymetrics gameThe "balloon game" measures a candidate's relationship to risk. Pymetrics
A cautious user who takes a small amount of money from each balloon to avoid losing anything is neither better nor worse than an adventurous user who tries to take each balloon to its limit.
"There is no right or wrong in the spectrum, and we're not just making that up to make you feel good," Polli said. "Traits at either end of the spectrum could be really well-suited to different careers."
Unilever had exceptional employees in different roles play the games and used their results as a benchmark to measure new candidates against.
Users are told immediately after each game how their performance was analyzed, and recruiters can see those results compared with benchmarks. Polli said a candidate's performance on each of the games could vary depending on context — the same way their performance on the SAT would change if they were tired versus alert, for example. But unlike with the SAT, she said, practice would not significantly alter one's performance on the Pymetrics games.
Unilever candidates who did not make it to the next round could submit their results to other companies that partner with Pymetrics.

Step 3: Interview with HireVue

Candidates who have the traits required of the position they're applying to then take a HireVue interview, which can be done with a computer camera or with a smartphone. They spend a few minutes on each of the questions required for their role, speaking to the camera. The interviews are not live.
hirevueCandidates can do their HireVue interview on their smartphone. HireVue
HireVue's AI analyzes each of the answers, noting aspects like keywords, body language, and tone. Hiring managers then see a detailed list of candidates the program deemed performed best.

Step 4: Spend a day in the life

After the algorithms help managers pick the most promising candidates, it's time to let human judgment take over.
Candidates who have made it this far are invited to a Unilever office to experience what the job would entail, and if the recruiter working with them deems them a fit, they will receive an offer shortly after their visit.

Going from 0 to 100

Polli said that of all her company's clients, Unilever was "by far the one that went from 0 to 100." Unilever learned about Pymetrics in mid-2015 and decided to use it the following February.
Rather than undergoing a small beta phase, Unilever used the process described above with all intern applications as proof of concept, then rolled it out to all entry-level positions.
Clementi said his team was still finding ways to refine the process and ensure candidates have an enjoyable experience that is unique to Unilever and not overly mechanized. But he said he was overjoyed with the first year's results and already testing ways the process could be used as a supplement for mid-career hires or lateral internal changes.
"Unilever, like most big companies, we're trying to reinvent ourselves," Clementi said. "And we are really trying to digitize everything."
In 2015, he believed that embracing Pymetrics and HireVue, rather than gradually trying small experiments, would give Unilever "an opportunity to be a leader in this sector."
"Amazingly, our leadership team was also all in, and we decided to do it," he said.

A game developer made over $100 million in 3 months — here's how he's spending his wealth

A game developer made over $100 million in 3 months — here's how he's spending his wealth

More than just a bizarre name, "PlayerUnknown's Battlegrounds" is a brilliant concept. It's no surprise that the game — which still hasn't officially launched — has already racked up over $100 million in revenue. This is a game that's exclusively available on PC and isn't even finished with development, yet it's already being played by over 4 million people.
There's a simple explanation for why it's doing so well: It's an unbelievably good game.
playerunknown's battlegroundsBluehole Studios
Here's how the average match of "PlayerUnknown's Battlegrounds" goes:
You're jammed in a crappy plane with 100 other people, flying above an abandoned ex-Soviet island. You can jump whenever you want, knowing that as you plummet to the ground, 99 other people are plotting your imminent death. Of course, you're plotting theirs as well, just as soon as you can get your hands on a weapon.
playerunknown's battlegrounds parachutingBluehole Studios via SideArms4Reason/YouTube
Thankfully, though the island is uninhabited aside from you and the enemy players, the island — including all its houses, hospitals, and gas stations — are packed with P9s, AKs, and plenty of body armor. 
As you scramble to put together a small arsenal and supplies for survival, you're also contending with the other 99 people doing the same thing. Sometimes those folks want to fight, and sometimes they're unarmed and just as terrified of you as you are of them. Every interaction with another player in "Battlegrounds" is a gamble.
So, where in the world did this game come from? 
PlayerUnknown's BattlegroundsBluehole Studios
It was created by a studio in South Korea named Bluehole, and its creative director is an Irish man named Brendan Greene (AKA "PlayerUnknown"). Though Bluehole was already an established game developer, most famous for having created a successful MMO called "Tera," the company has found sudden outrageous success with "Battlegrounds." For a game that's not even complete yet, to have already racked up over 4 million copies sold is extremely rare — more akin to the explosive success of something like "Minecraft" than standard game launches.
Given that sudden, extreme success, I wondered how Greene and co. were handling things. Were they partying non-stop? Taking lavish vacations? Buying gold toilets? Outbidding Jay Z and Beyoncé for luxurious LA abodes?
"No, f--- that. I'm a simple man, and I'm happy when I have internet and a nice bottle of wine," the game's creative director Brendan Greene told me in an interview at the annual video game trade show, E3, in mid-June. "I have five pairs of the same Bermudas. I have a Converse problem, but they're my guilty vices. I don't want a fancy car. A nice house would be good." 
So, no Ferraris then. Instead, Greene is focusing on setting up his daughter for life. "For me, personally, I have a daughter. I do this for her. I don't want to spoil her, but she'll never need to worry," he said.
fire extinguishers minecraft houseOne of the many rooms in the $70 million house that "Minecraft" creator Markus "Notch" Persson bought in 2014.Rodeo Realty
Unbelievably, Greene doesn't seem to be freaking out at all with the sudden infusion of cash. He's a friendly, charismatic gentleman. He speaks excitedly about the game he's making, and is seemingly trying to avoid confronting its potential as a behemoth. Though the game has only been available since March, it's already sold over 4 million copies — it's still in "Early Access," which means it's not complete. Bluehole is planning a "1.0" version for later this year, and an Xbox One version of the game by year's end.
All of which is to say one thing: "Battlegrounds" is, if anything, just getting started. It's entirely possible that Greene is just at the start of a wild roller coaster ride. But he's staying cool.
"Apart from a few more smiles around the office, the focus is on making a good game," he told me. "That hasn't changed. Sure, we've been super successful, but it hasn't really affected me or the team that much." The focus, he said, is on making the game as good as possible. "I have a goal in mind for Battle Royale as a game mode, and 'Battlegrounds' as a game, and — until we get there — I'm not celebrating just yet. This could all be gone in a second, as is the way with the internet. We want to finish it, and get it done, then we'll relax for a bit."
Get the latest Microsoft stock price here.

Staples is being acquired by a private-equity firm for $6.9 billion

Staples is being acquired by a private-equity firm for $6.9 billion

Customers shop at the Staples store in Manhattan, New York, U.S., August 15, 2016. REUTERS/Eduardo Munoz  - RTX2L3JJCustomers shop at the Staples store in Manhattan, New YorkThomson Reuters
SPLS Staples
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Staples agreed to be acquired by Sycamore Partners for about $6.9 billion.
The company announcedWednesday that it entered a merger agreement with the private-equity firm in which its shareholders will receive $10.25 per share in cash.  
According to Reuters, Sycamore won an auction for the office-supplies retailer that reported a 7.1% drop in retail revenue last year. Staples scrapped a merger with Office Depot in May 2016 that would have given it more muscle to compete with online retailers.
"We have tremendous confidence in CEO Shira Goodman and great respect for the Staples management team and are excited about this opportunity to partner with them to accelerate long-term profitability," said Stefan Kaluzny, the managing director of Sycamore Partners, in a statement. 
Barclays and Morgan Stanley are acting as Staples' financial advisors, while nine banks including Bank of America Merrill Lynch and UBS are providing debt financing to Sycamore Partners. This deal, expected to be completed by December 2017, would be the largest leveraged buyout this year, according to Dealogic data cited by the WSJ. 
Staples shares jumped 8% in late trading on Wednesday after The Wall Street Journal and Reuters reported that the company was close to being acquired. 
Staples' stock closed at $9.93, and the company had a market cap of about $6 billion.  

The Trump administration announces sweeping changes to airline safety

The Trump administration announces sweeping changes to airline safety

john kellyHomeland Security Secretary John Kelly. Associated Press/Susan Walsh
On Wednesday, Secretary of Homeland Security John Kelly announced an array of sweeping changes aimed at making flying safer in a speech at the Council for New American Security Conference in Washington, D.C.
The changes include enhanced overall passenger screening, heightened screening of personal electronic devices, more thorough screening at checkpoints, along with the increased use of security technology, canines, and preclearance locations.
These new measures, both seen and unseen, affect all commercial airline flights into the US. According to the DHS, that figure is around 2,100 flights per day. 
According to airline sources, passengers' in-flight experience should not be affected by these changes. 
In his speech, Secretary Kelly reaffirmed his belief that terrorist organizations are continuing their efforts to bring down an American airliner.  
In addition, Secretary Kelly did not announce an expansion of the laptop ban that currently affects 10 airports in eight countries in the Middle East and North Africa. However, the secretary did say that parties who do not cooperate in the implementation of these new security measures may be subject to a new laptop ban. 
The DHS has not given a specific time frame for when these new measures will be implemented. However, the agency did indicate that some changes will take effect within a matter of weeks. 
More: BITranspo

All big US banks pass Fed's stress tests, immediately proceed to splurge on buybacks and dividends

All big US banks pass Fed's stress tests, immediately proceed to splurge on buybacks and dividends

Goldman Sachs CEO Lloyd BlankfeinGoldman Sachs CEO Lloyd Blankfein. REUTERS/Gary Cameron
The Federal Reserve has approved plans from the 34 largest U.S. banks to use extra capital for stock buybacks, dividends and other purposes beyond a cushion against possible catastrophe.
On Wednesday, the Fed said all of the 34 banks had passed the second, tougher part of its annual stress test, showing that many of the biggest lenders have not only built up adequate capital levels but also improved their risk management procedures.
One bank, Capital One Financial Corp, must resubmit its scheme by year-end, though the Fed is still allowing it to go forward with its capital plan in the meantime.
Fed Governor Jerome Powell, who is acting as regulatory lead for the U.S. central bank, said the process "has motivated all of the largest banks to achieve healthy capital levels and most to substantially improve their capital planning processes."
The banks' own plans on how they will use extra capital will not be known until they make their own announcements.
The verdict marks a significant victory for the banking industry, which has worked for years to regain its stature following the 2007-2009 financial crisis. The green light could also serve as a watershed moment for Wall Street, which is eager to get a lighter regulatory touch from policymakers in Washington.
Capital One must resubmit plans because it did not appropriately account for risks in "one of its most material businesses," the Fed said.
The Fed did not specify which business. Capital One's most significant business is credit card lending. It has also built up a presence in auto lending. Both areas have been flagged by bankers and analysts as showing signs of weakness.
Capital One has until year-end to deliver an improved submission, but the Fed gave it permission to move forward with its plan until then. Capital One had already resubmitted a plan with a reduced capital request since the first set of stress-test results was released last week.
American Express Co had also resubmitted a plan with reduced requests, improving its capital ratios, and the Fed did not require it to resubmit again.
Other big banks, including JPMorgan Chase & Co, Bank of America Corp, Wells Fargo & Co, Citigroup Inc, Goldman Sachs Group Inc and Morgan Stanley also cleared the Fed's bar.
(Reporting by Pete Schroeder in Washington and David Henry in New York; Writing by Lauren Tara LaCapra; Editing by Leslie Adler)
Read the original article on Reuters. Copyright 2017. Follow Reuters on Twitter.

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