Author Archives: Scalper1
Apple-FBI Encryption Battle, Facebook Arrest Flash At RSA
SAN FRANCISCO — Apple’s ( AAPL ) encryption battle with the FBI flashed again Wednesday as Silicon Valley bigwigs largely sided with the iPhone-maker during the RSA Conference in San Francisco, Calif., saying the policies of their companies also wouldn’t allow for government backdoor access. The debate at the big annual security event also followed the arrest Tuesday of Diego Dzodan, a Facebook ( FB ) exec in Brazil, who refused to decrypt WhatsApp communications in compliance with a government order. Dzodan’s arrest was yet another flash point in the ongoing battle. Wednesday, a Brazilian judge ordered police to set Dzodan free. At an RSA panel discussion Wednesday Michelle Dennedy, Cisco Systems’ ( CSCO ) chief privacy officer, said the network gear giant, per policy, wouldn’t provide the government backdoor access to encrypted communications. Silicon Valley companies such as Alphabet ( GOOGL ), Facebook and Microsoft ( MSFT ) also have sided with Apple. Congress has yet to legislate backdoors, and outdated telecom laws don’t tackle the now-hot topic. The Paris terror attacks and a mass shooting in San Bernardino, Calif., have reignited the issue on Capitol Hill, where legislators are weighing privacy concerns against law enforcement needs. In the latter case, the FBI ordered Apple to decrypt the iPhone belonging to one of the two San Bernardino shooters. Apple is fighting the order. Cisco’s policy would put it in the same hot waters, Dennedy said. “We do not intentionally build in backdoors, and we do not do business with others who do,” she said. “That is our policy.” Dennedy’s position was echoed throughout the discussion, entitled “Can Government, Encryption, Backdoor and Privacy Co-Exist?” Backdoor access can act as a master key to all encrypted communications within a system. Apple’s engineers haven’t created that key, Apple CEO Tim Cook says. Juniper Networks Saw A Backdoor Exploited Intentional or not, backdoor access will backfire, Johns Hopkins University associate professor Matthew Green argued Wednesday. In December, Juniper Networks ( JNPR ) discovered unauthorized code running on an operating system backing their firewalls that let hackers decrypt VPN-protected communications, Green said. Experts have speculated a National Security Agency random-number generator, employed by Juniper, was to blame for the exploited backdoor. “This is the danger with backdoors,” Green said. “Juniper was protecting the Department of Defense and could not keep people from monitoring their code.” Richard Marshall, CEO of Secure Exchange Technology Innovations, says companies need to concentrate on existing vulnerabilities within their systems. “You don’t need a designed vulnerability (such as with a backdoor) when there are so many other vulnerabilities being exploited on a day-to-day basis,” he said. “It’s so much easier for those adversaries to break into our systems and violate our privacy.” But the panelists didn’t side entirely with Apple. Marshall argued that U.S., and other, consumers have accepted the idea of reduced privacy. Chenxi Wang, chief security officer for Twistlock and the panel’s moderator, noted Apple pushed a U2 album out to millions of phones but won’t hand over the keys for government access. “Is this a double standard?” she asked. “This is beyond a double standard,” Marshall said. “This goes to the actual user and their reduced expectation of privacy. It’s a dangerous, slippery slope.” Dennedy, on the other hand, argued that the young-adult millennial generation is “crying” for privacy. Everything from their individualized clothing to the use of Snapchat messaging says as much. And therein lies the opportunity, she said. “People are trusting their commerce, their culture, their families and their communities to us (as corporations),” she said. “We have an ethical obligation to build privacy into their systems.” Her advice for companies? “Educate your users about what they are getting into rather than assuming, because they’ve fallen for your monopolistic practices, that they like it.” Image provided by Shutterstock .
New High Dividend ETF With Free Cash Flow Focus By Pacer
With the global market being edgy since the start of this year, demand for value-oriented and high-yielding products is high now. Agreed, every storm ends sometime and risk-on sentiments will return to the market. But this year seems to be a little different with growth worries expected to remain in the marketplace for a longer time (read: Enjoy High Yield with These Low Beta EM Local Currency Bond ETFs ). This operating backdrop makes the launch of Pacer Global High Dividend ETF (BATS: PGHD ) – launched by Pacer Funds Trust – extremely well timed. Let’s see how the fund is designed and what its prospects are. PGHD in Focus It is a strategy-driven, exchange-traded fund that looks to provide a steady stream of income and capital appreciation by picking companies with a high free cash flow (FCF) yield and an impressive dividend yield. The fund accomplishes its objective by tracking the Pacer Global Cash Cows Dividends 100 Index. The index first tracks 1000 companies in the FTSE all-world developed large-cap index. From the initial universe, 300 companies with the highest trailing 12-month free cash flow yield are chosen. From this set, 100 companies having the highest trailing 12-month dividend yield are picked to form the underlying benchmark. The fund currently holds 100 stocks. Currently, the U.S. is the top nation in the fund with over 35% weight followed by Switzerland (8.45%), the U.K. (7.14%) and Australia (6.77%). Sector-wise, Industrials (16.93%) and Consumer Staples (16.6%) dominate the fund with over 32% allocation, while Energy (5.8%) and Financials (0.82%) occupy the bottom two spots. The fund is equal-weighted in nature, with no stock accounting for more than 2.27% of the basket. Wal-Mart Stores, Altria Group and AT&T are the top three holdings of the fund. The fund charges 60 basis points in fees. As the name suggests, the fund is rich in yields with the Pacer Global Cash Cows Dividends 100 Index offering 5.06% annual yield (as of January 29, 2016). How Could it Fit in a Portfolio? The fund could be a good choice for value investors with a global market focus. Against the present low-yield backdrop worldwide, the hunt for higher yield is common among investors. This, accompanied by the higher free-cash flow yield criteria, provides the portfolio a value quotient as these companies traditionally suffered less during the economic upheaval, per the factsheet (read: 3 Dividend ETF Winners Year to Date ). Also, the issuer went on explain that higher free cash flow generating companies are also great tools to tap growth opportunities as these in turn result in capital gains. Moreover, the fund’s exposure to numerous economies is expected to provide huge diversification benefits to investors. However, investors should note that the ETF will be subject to severe currency risk. As such, the product is most suitable for long-term investors, willing to bear any currency volatility in the short run. ETF Competition The high dividend yield space is chockablock with products. From that angle it wouldn’t be easy for the fund gain enough market share. So, the fund will have to sell the highest free-cash flow yield feature to hog investors’ attention. This space is yet to be exploited. TrimTabs International Free-Cash-Flow ETF (NYSEARCA: FCFI ) normally grabs the attention of investors interested in the free-cash flow related funds. FCFI looks to track the international companies with the highest free cash flow yields. But since FCFI yields only 1.21% annually (as of February 24, 2016) and charges 69 bps in fees, the newly launched PGHD has chances to score more, with increased yield and a lower expense ratio. Link to the original post on Zacks.com