Archives for March 2019

South Korea's burned out millennials chose YouTube over Samsung

SEOUL (Reuters) – Yoon Chang-hyun’s parents told him to get his sanity checked when he quit his secure job as a researcher at Samsung Electronics Co in 2015 to start his own YouTube channel.

Yoon Chang-hyun works on his Youtube clip in Seongnam, South Korea, February 12, 2019. REUTERS/Kim Hong-Ji

The 65 million won ($57,619) a year salary – triple South Korea’s average entry level wage – plus top-notch healthcare and other benefits offered by the world’s biggest smartphone and memory chip maker was the envy of many college graduates.

But burned out and disillusioned by repeated night shifts, narrowing opportunities for promotion and skyrocketing property prices that have pushed home ownership out of reach, the then 32-year old Yoon gave it all up in favor of an uncertain career as an internet content provider.

Yoon is among a growing wave of South Korean millennials ditching stable white collar jobs, even as unemployment spikes and millions of others still fight to get into the powerful, family-controlled conglomerates known as chaebol.

Some young Koreans are also moving out of city for farming or taking blue collar jobs abroad, shunning their society’s traditional measures of success – well-paid office work, raising a family and buying an apartment.

“I got asked a lot if I had gone crazy,” Yoon said. “But I’d quit again if I go back. My bosses didn’t look happy. They were overworked, lonely…”

Yoon now runs a YouTube channel about pursuing dream jobs and is supporting himself from his savings.

Samsung Electronics declined to comment for this article.

Chaebols such as Samsung and Hyundai powered South Korea’s dramatic rise from the ashes of the 1950-53 war into Asia’s fourth-largest economy in less than a generation. Well-paid, secure jobs provided a gateway to the middle-class for many baby boomers.

But with economic growth stagnating and competition from lower cost producers weighing on wages, even milliennials who graduated from top universities and secured chaebol jobs say they are less inclined to try to fulfill society’s expectations.

Similar issues among younger workers are being seen globally. However, South Korea’s strict hierarchical corporate culture and oversupply of college graduates with homogeneous skills make the problem worse, says Ban Ga-woon, a labor market researcher at state-run Korea Research Institute for Vocational Education & Training.

South Koreans had the shortest job tenure among member countries in the Organization for Economic Co-operation and Development (OECD) as of 2012, just 6.6 years compared to the average of 9.4 years and 11.5 years in neighboring Japan.

The same survey also showed barely 55 percent of South Koreans were satisfied with their jobs, the lowest rate in the OECD.

This January, ‘quitting jobs’ appeared on the nation’s top 10 new year resolution list on major social media sites.

‘DON’T TELL THE BOSS’

Some workers are even going back to school to learn how to do just that.

A small three-classroom campus in southern Seoul, named “School of Quitting Jobs”, has attracted over 7,000 attendees since opening in 2016, founder Jang Su-han told Reuters.

The 34-year-old Jang, who himself quit Samsung Electronics in 2015 to launch the school, said it now offers about 50 courses, including classes on how-to-YouTube, manage an identity crisis, and how to brainstorm a Plan B.

The school’s rules are displayed at its entrance: “Don’t tell your bosses, say nothing even if you run into a colleague, and never get caught until your graduation.”

“There is strong demand for identity-related courses, as so many of us were too busy with cram schools to seriously think about what we want to do when were teenagers,” he said.

To be sure, the lure of a prestigious chaebol job remains strong, especially with the country mired in its worst job slump since 2009 and youth joblessness near a record high.

Samsung Electronics is still the most desired workplace for graduates as of 2019, a survey of 1,040 job seekers by Saramin, a job portal, showed in February.

However, many entering the workforce are much less willing to accept the long hours or mandatory drinking sessions synonymous with the country’s hierarchical, cutthroat corporate life, says Duncan Harrison, country head of London-based recruitment agency Robert Walters Plc.

“The mindset of people entering the workforce is very different from past generations,” Harrison said.

YOUTUBER, SPORTS STAR, CLEANER

Among elementary school students, YouTube creator is now the fifth-ranked dream job, behind being a sports star, school teacher, doctor or a chef, a 2018 government poll showed.

Some are choosing a simpler life in the country.

Between 2013 and 2017, South Korea saw a 24 percent increase in the number of households who ditched city life for farming – more than 12,000 in total.

And in the face of dwindling opportunities at home, nearly 5,800 people also went abroad for jobs last year using government-subsidized programs, more than tripling from 2013, according to government data.

Others left without support or new jobs lined up.

Slideshow (7 Images)

Plant engineer Cho Seung-duk bought one-way tickets to Australia in December with his wife and two kids.

“I don’t think my son could get jobs like mine in South Korea,” said 37 year-old Cho, who moved from Hyundai Engineering & Construction to another top construction firm in 2015 before he emigrated.

“I will probably clean offices in Brisbane, but that’s ok.”

Reporting by Cynthia Kim; Editing by Soyoung Kim and Lincoln Feast

Alphabet: 3 Reasons Why You Should Still Buy The Stock

We are currently in the process of moving into a larger office space and finding furniture that will give the new office the look and feel we are going for. Naturally, I searched for different design options by googling office furniture using my Chrome Browser. Now, I can’t get rid of all of the office furniture ads that pop up regardless of what website I am visiting. That’s Google at work.

The fact that I now use the word Google as a noun, and that I personally rely on it like I rely on my eyes to see, is a testament to how embedded in our lives Google and googling has become. (I’m not even getting a spelling correction suggestion on the word ‘googling’)

We know the company changed its name to Alphabet (GOOG) (NASDAQ:GOOGL) a few years ago, but Google still makes up the majority of its revenues and profits, despite its alphabet soup of different products and services. Most of the ‘Other Bets’ are long shot investments with lots of idealistic upside potential but most of which will fail or fail to make much of an impact to the overall business. Luckily for Google, they have $100 billion in cash that allows them a few more than three strikeouts per inning as they swing for the fences. Investors that got in early have profited handsomely from its dominance of the search and ad business, but is it too late for anyone that missed the boat the first time?

If you haven’t invested in Alphabet yet and think it might be too late, think again. Here are several reasons why we think the company is still a Buy.

Cash

The company has $100 billion in cash and that can go a long way to finding the ‘next big thing’. It is focusing its efforts on the following:

  • Research and Development spending alone is more than the market cap of the largest mid-cap company. Last year, the company spent $21 billion in R&D, primarily to capitalize on new trends like virtual reality, artificial intelligence, augmented reality, machine learning, 5G and quantum computing. With $100 billion in cash currently on the balance sheet, it could afford to invest aggressively even if many of the investments fall short of expectations. One home run puts the company on track for another long run.
  • Hardware – The company is increasing its presence in hardware to manufacture its devices end-to-end, in response to preempt the threat of rising costs from 3rd party hardware manufacturers and ensure a seamless integration between its hardware and software. The Pixel, which is built on a lean, strong, non-bloated, version of Android, is a good machine and could lead to more direct competition with Samsung (OTC:SSNLF), potentially creating an Apple (NASDAQ:AAPL)-like opportunity for Alphabet. Do not discount the possibility that Alphabet gets heavier into hardware and potentially spins out such a company.
  • Cloud – Google’s huge presence in the cloud industry lets it to tap into the growing markets within the cloud space. The cloud computing market is estimated to be worth $623.3 billion by 2023 and the cloud storage market to be worth $88.91 billion by 2022. It has the opportunity to expand the Google Cloud business in the enterprise market over the next 3 to 5 years. There is an opportunity to capture market share and the market will likely continue to grow to accommodate IoT, edge computing and the “smart everything” world.

Growth

  • Asia Pacific – According to analyst estimates, the Indian and Southeast Asian e-commerce market is expected to reach $150 billion by 2022 and $240 billion by 2025, respectively. And growth in Indian digital commerce is a huge opportunity for payment processing and the industry is expected to reach $1+ trillion by 2025. Google launched mobile payments platform Tez in India in September 2017. The payments industry is also expected to reach $200 billion in Southeast Asia. With Google having established a presence in these nascent markets, it is well positioned to take advantage of a significant revenue opportunity.
  • Shared Mobility – Shared mobility market is estimated to be worth $619.51 billion by 2025 with a CAGR of 25.1% (of which Autonomous driving is estimated to be reach $556.67 billion by 2026 with a CAGR of 39.47%). Alphabet is considered to be the market leader with its offerings for autonomous driving and can establish itself as a major player in this space.

Online Search

Online Search and Advertising – Last but not least, Alphabet is still the leader in online advertising, deriving 87% of its revenue from online advertising. This revenue has been growing at a strong double-digit pace, which is driving double-digit earnings growth and is expected to continue to do so for at least five more years. The word Google is now commonly used as a verb when people have a question about something or are debating the facts about a topic. “Let me google it” is the de facto solution – the judge, the correct answer. The company’s 92.2% market share for internet search, including video content through YouTube, mobile OS, and internet search engines, is almost insulting to competitors considering how hard they are trying to steal market share. It has also launched Shopping Actions in an attempt to regain some of its control over product searches that have migrated to platforms like Amazon (NASDAQ:AMZN). Shopping Actions is a tool that integrates the retail experience across Google’s platforms (including mobile, desktop, and voice-powered devices). Early tests suggest that the project is increasing online shopping cart sizes by as much as 30%.

Google search technology is also contracted out to major online services and communications companies, giving it a massive moat that no competitor is close to challenging short term.

YouTube is a popular video viewing site with one billion hours viewed daily. That equates to 115,000 years of videos viewed daily. That large amount of viewership attracts advertisers to the site. And YouTube has entered the pay space which is directed at “cord cutters” and is now generating subscription revenue.

And let’s not forget the company’s database of information on all of us. It is overwhelming and would cost tens or hundreds of billions to replicate and could take years if not decades.

Return on Equity

But wait, there’s more. Many readers are familiar with Warren Buffett and his focus on Return of Equity. After all, if you’re buying the stock, you’re interested in the return you’re getting for investing in the equity of that company, right?

What strikes me as remarkable about the ROE for Alphabet is both it’s sustained level in the mid-teens and the remarkable consistency it has maintained over the last 5-6 years – especially for a mature Technology company. The analysis below indicates that ROE has fluctuated between 13% and 17% over the last 7 years with a only a brief dip into the high single digits in 2017.

The consistency has been pervasive throughout its business, and using the DuPont analysis, we see that all three drivers of ROE have been steady as well. Only profit margin decreased in 2017, which is why the ROE dropped to just over 8%. But other than that, financial leverage has remained in a tight range between 1.2 and 1.31. Asset Turnover has ranged from 0.49 to 0.59. And profit margins are consistently in the low 20s – except for 2017.

Valuation

After a 16% annualized return over the last 5 years, you might think the stock is due for a pause. But EPS is expected to grow by 6% in 2019 and then 17% in 2020. At a normalized PE ratio of 29, the stock would be trading at a price of over $1,325, a 13% gain at the time of this writing. If EPS growth of 17% in 2020 comes to fruition, the price is likely to break through $1,500 – and that is a conservative estimate based on no new home runs playing out in the short term.

According to 43 analysts providing price targets, Google is trading below even the most conservative target of $1,250 and well below the high estimate of $1,435. We rate the stock a strong buy.

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Disclosure: I am/we are long GOOG. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: This article is meant to identify an idea for further research and analysis and should not be taken as a recommendation to invest. It does not provide individualized advice or recommendations for any specific reader. Also note that we may not cover all relevant risks related to the ideas presented in this article. Readers should conduct their own due diligence and carefully consider their own investment objectives, risk tolerance, time horizon, tax situation, liquidity needs, and concentration levels, or contact their advisor to determine if any ideas presented here are appropriate for their unique circumstances.

3 Monthly Dividend Stocks Beating The Market In 2019, 7% To 9% Yields, Insiders Buying, No K-1s

Last week we covered 3 high yield stocks which had been left behind by the market in 2019. This week we’re checking out 3 high yielders which have outperformed the market in 2019.

All 3 of them are vehicles from Gladstone Corp: Gladstone Investment Corp., (GAIN), and Gladstone Capital Corp., (GLAD), are business development companies, while Gladstone Commercial Corp., (GOOD), is a REIT.

GAIN focuses on acquiring mature, lower middle market companies with $20 to $100 million in revenue, whereas GLAD was one of the earliest BDCs and focuses on investing in loans to lower middle market businesses.

GOOD invests in and owns net leased industrial, commercial and retail real property and selectively makes long-term industrial and commercial mortgage loans.

All 3 have benefited from an increasingly dovish Fed, with very good price performance so far in 2019, with GAIN leading the pack, at 25.75%, followed by GLAD, at 23.29%, and GOOD, at 15.46%, vs. 12.05% for the S&P 500.

GAIN and GOOD have also outperformed over the past half-year and 1-year periods, while GLAD has underperformed:

Dividends/ Distributions:

All 3 companies distribute monthly dividends, and go ex-dividend ~ the middle of the month, with pay dates near the end of the month.

The dividend payout ratios are based upon net investment income – NII – for GAIN and GLAD, and Funds From Operations – FFO – for GOOD, since it’s a REIT.

GLAD currently has the highest yield, at 9.32%, followed by GOOD, at 7.16%, and GAIN, at 6.97%.

GAIN has a much lower payout ratio than the other 2, at ~29%, and the best 5-year dividend growth rate, at 6.55%.

Taxes:

GAIN’s 2018 payouts were classified as 75.42% ordinary dividends, with the balance being capital gain dividends and qualified dividend income.

GLAD’s 2018 payouts were classified as 97.8% ordinary dividends, with the balance being classified as qualified dividends.

GOOD’s 2018 payouts were classified as 75.52% Return of Capital, with the balance characterized as an ordinary dividend.

Earnings:

GAIN had 6.6% growth in total investment income, but its net investment income dove -77.82%, due to higher expenses, including ~$13M in higher incentive fees, $2.5M in higher interest expenses, and ~$1.4M in added G&A expenses. Its NAV/share rose by 20.83% in calendar year 2018, to $12.53.

GAIN’s most recent fiscal year ended on 3/30/18, so we assembled calendar years 2018 vs. 2017 figures.

Note: All of the figures in the following 3 tables are in $ millions, excepting NAV/Share.)

GLAD, whose fiscal year ended on 9/30/19, had better growth figures for total and net investment income, with 16.19% and 7.75% respectively. For the calendar year of 2018, its NAV/share declined by -5.9%, to $7.98, vs. $8.48 at 12/31/17:

GOOD, the REIT in this group, reports on a calendar year basis, had revenue growth of 12.66%, and big net income growth of 119.78%. FFO also had a healthy gain of 12.21%:

Insiders:

All 3 companies have a fairly recent history of insider buying. These 3 insider buying tables are sourced from Finviz.

GAIN’s management took advantage of the general market pullback in Q4 ’18, and bought 8500 shares:

GLAD’s management made similar moves in Q4 ’18, and bought over 32,000 shares:

Meanwhile, GOOD’s management has kept the buying spree going into March ’19, but at a more modest pace than the other 2 companies’ 2018 purchases. GOOD’s president Robert Cutlip has amassed over 48,000 shares. Nice to see management with skin in the game.

Valuations:

BDC’s GAIN and GLAD are both selling at valuations slightly higher than Book Value, at 1.08X and 1.13X respectively. GAIN shows a much lower Price/Net Investment Income – NII – of 4.66, while GLAD comes in at 8.55, nearly twice as high. Their trailing P/Es vary widely, with GLAD showing 29.10, vs. 3.79 for GAIN.

GOOD shows a trailing Price/FFO of 13.25, with a higher Price/Book of 2.5X, and a similar Price/Sales of 6.04X.

Analysts’ Price Targets:

GAIN also has the biggest upside spread vs. analysts’ average price targets, at 5.21%, vs. 3.63% for GOOD and -8.1% for GLAD.

Financials:

GAIN wins the race over GLAD in the Financials category also, with a higher ROA, ROE, and Operating Margin, and slightly lower debt leverage.

GOOD’s ROA of 2.39%, ROE of 3.57%, and 33.50% Operating Margin compares well vs. broad diversified REIT averages of 1.18%, 2.82%, and 23.75% respectively. Its Debt/Equity of 1.67 is also lower than industry averages of 2.77.

Options:

All 3 of these vehicles have options available, with GOOD’s cash secured put options being the most interesting.

We added this September trade to our free Cash Secured Puts Table, where you can see more details for it, and over 35 other put-selling trades, all of which are updated throughout each trading day.

GOOD’s September $20.00 put pays a bid of $.65, which is $.10 below its total monthly dividends during this 6-month period. It has a breakeven of $19.35.

If you’re new to options selling, we have an Options Investing Glossary which defines the terms you’ll encounter in this type of trading.

Summary:

We rate GAIN a Buy, based upon its lower valuations, better payout ratio, and bigger upside variance to the average price target. There are also preferred shares and exchange-traded notes for GLAD and GOOD.

Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in GAIN over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: CLARIFICATION: Our legacy website, www.DoubleDividendStocks.com, has focused on options-selling for high dividend stocks, for the past 10 years.

Will Robots Take Over Your Job? Take This 1-Question Quiz to Find Out

The robots are coming! What once seemed like a dystopian novel is seeming more like reality by the day.

A quarter of jobs in the U.S. stand to be disrupted by artificial intelligence, a recent report from the Brookings Institution found. Kai-Fu Lee, a leading A.I. researcher, investor, and computer scientist estimates that in the next 15 years, up to 40 percent of jobs could be replaced by algorithms, robots, and other types of artificial intelligence.

Lee offers a multi-question quiz on his website to determine if your job might be at risk. But really, it can all be boiled down into one simple question.

How repetitive is your day-to-day work?

In A.I. in 60 Seconds, Lee explains that A.I. is limited to doing the same things over and over again. “Within a single domain, A.I. is able to take tasks from our everyday jobs that are routine and repetitive and do them in a better way than we humans can do.”

The more repetitive and routine your work, the more likely it will be taken over by A.I. Here’s another way to look at it, from a New Yorker piece titled Are Robots Competing For Your Job?: “If your job can be easily explained, it can be automated,” Anders Sandberg, of Oxford’s Future of Humanity Institute, tells Oppenheimer. “If it can’t, it won’t.”

What can you do that A.I. can’t?

While A.I. can do many things well, Lee reminds us that there are many things it can’t do so well. Your human brain give you a competitive advantage.

A.I. isn’t creative. It can’t think strategically. It doesn’t plan. And above all, it can’t have compassion or emotional intelligence. If you’re worried about your job being taken over by robots, Lee encourages you to zero in on how you can enhance and improve the skills that A.I. will never be able to gain. Try to figure out how to stop doing low value work or automate that work yourself.

Economist Richard Baldwin agrees. He advises that instead of trying to compete with A.I., let the robots do their thing. Focus your attention on building your in-person human skills, such as improving communication, developing insights, and effectively collaborating with other people at work. “Realize that humanity is an edge not a handicap,” he told the New Yorker.

Creativity is one of the most in-demand soft skills.

LinkedIn recently analyzed 50,000 professional skills that appear in its job postings. It used the data to determine the most in-demand job skills employers are looking for.

Creativity was the top soft skill that appeared again and again in job postings. Across hard skills and soft skills, it was still number two overall.

“It’s no stretch to say creativity is the single-most important skill in the world for all business professionals today to master,” LinkedIn concluded.

My Company Asked More Than 1,200 CEOs About the Most Important Decision They'll Make in 2019. Here's What They Said

Talent issues are top-of-mind for business leaders in 2019. In fact, according to a new report from my organization, CEOs of small and midsize businesses rank decisions about talent higher in importance than decisions about customers and financials.

Despite concerns for the economy, 65 percent of the 1,257 CEOs included in the Q4 2018 Vistage CEO Confidence Index report said they planned to increase hiring this year. This was a shade lower than the recent 15-year peak of 71 percent, but current recruitment intentions are still greater than at any other time recorded by our survey since 2003.

With the United States almost at full employment and wages rising, hiring won’t be easy during the next 12 months. CEOs are employing a variety of strategies to cope with this challenge, such as boosting wages (64.6 percent), adding employee benefits (36.1 percent), investing in equipment to automate tasks (35.2 percent) and allowing employees to work remotely (25.1 percent).

However, there are other strategies to consider. Here are two that I recommend.

1. Work smarter, not harder, on talent sourcing  

One of the most effective ways to source new talent is through employee referrals. Engage your existing workforce in the recruitment process by starting a referral program that provides incentives to employees to help bring the best people on board. Start an open conversation with all employees about how you reward effort to address any questions about compensation.  

Professional networks can also be a valuable source of top talent. Use them to target both people who are actively seeking new roles and those who are happy working elsewhere, even if that’s with your competitors. 

2. Get creative with professional development

Nearly three-quarters (71 percent) of the CEOs we surveyed recognized employee development will be key to their talent-management strategy in 2019. People are a business’s number-one asset. Giving them room to grow in the organization is one of the most effective ways of making them feel more valued, which can increase their productivity and make them stick around longer.

But don’t stop at training workers to be better in their current roles. Give them opportunities to develop communication, collaboration and leadership skills, and recognize their achievements with managed career progression. Connect senior leaders to junior team members through a mentorship scheme, too, and you’ll soon have a strong talent pipeline. 

Disney's Fox Merger is a Privacy Nightmare Waiting to Happen. Here's Why.

[unable to retrieve full-text content]Disney’s acquisition of Fox has increased their catalog of popular
children’s and family franchises. How they use that data should be
a cause for concern.

Burley Encore X Review: A Fun but Flawed Bike Trailer

“There’s no reason to be afraid,” my spouse scolded, as my 1-year-old and 4-year-old shrieked at the top of their lungs. You would’ve thought they were being roasted alive, instead of merely strapped into the Burley Encore X as their parents gingerly hauled it down a small, steep hill to the beach.

For a minute, the stroller was poised over a three-foot drop. I held the roll bar from the top and lowered it to my spouse as I braced my feet on a tree root and thought, “Hey, I might start shrieking, too.” You can’t blame toddlers for tantruming when the tantrum makes perfect sense.

Our kids are used to this. Ever since my son has been big enough to hold his head up on his own, we’ve been hauling them around in the active parents’ bike trailer of choice, a Thule Chariot. The Chariot has different iterations at different price points, but each iteration can be modified for jogging, biking, or cross-country skiing.

This year, Burley released a series of new, rugged child bike trailers. While the the Eugene, Oregon-based company is known for super-safe designs, it’s hoping that the new Cub X, D’Lite X, and Encore X will get more Burley trailers off the streets and onto the sand, snow, and dirt.

I opted to test the Encore X performance sport stroller-trailer. It has suspension, in comparison to the more affordable Encore, but fewer of the luxury features of the D’Lite model. After a few weeks of testing, I still prefer our Chariot. But Burley’s many fans will find plenty of reasons to love the Encore X.

And It Was All Yellow

Burley

The Encore X is easy to assemble and use. Like Burley’s jogging stroller, the Solstice, the manipulable parts are set off in bright yellow plastic, so you know exactly which parts you are supposed to wrestle with and which ones you should leave alone.

At 31 inches across, it’s narrow enough to fit through our front door—just barely—and at 24.7 pounds, it’s lighter than our Chariot Cheetah, which weighs 26.5 pounds. It comfortably fits my two kids, but it’s worth noting that its total capacity is only 100 pounds. I’m probably only going to be able to carry both children in it for another year or so.

I might be able to use it for a little longer if I can resist packing it full of stuff. The Encore X has an awe-inspiring cargo capacity. It’s hard not to start tossing random things into the 60-liter cargo bin, like picnic blankets, tennis rackets, or dog food. You can also remove the seats to convert it to a cargo trailer.

It also comes with a one-wheel stroller conversion kit. To use it, screw the Burley hitch on your rear axle. When you want to bike, hook up the trailer hitch with by sliding in the pin and locking it; flip small front wheel up and you’re ready to go. When you want to convert it to a stroller, unhook the pin and flip the front wheel down. The transition is quick and easy, and unlike the Chariot, you don’t have to worry about finding a way to carry or store the hitch bar. Some convertible strollers, like the Thule Chariot, do have a sturdier ball-and-socket attachment in addition to a pin.

Finally, the Encore X comes with all the standard features that help make the company’s trailers so beloved among biking baby-havers: it comes with a skid guard to protect the bottom of the trailer, and the wheels have guards and are easy to switch out with the pop of a big, yellow button.

And the suspension works! I biked two kids and all their stuff on everything from dirt trails, to sand and gravel paths, and no one protested or cried (except for that one time).

Not so Burly

Burley

As a bike trailer, the Encore X is nearly perfect. For two weeks, I towed my children to and from school. A sunshade and UV-protective panels protected my kids from the sun, and the big storage container meant that I didn’t have to attach panniers to my bike rack to carry all their backpacks and jackets. I could throw in a friend’s skateboard in the back when he wanted to walk with us, or a basketball to play at the park.

When I took it on more adventurous excursions, cracks began to show. The Encore X meets ASTM F1975-09 safety standards and survived extensive drop- and crush-testing thanks to its heat-treated aluminum roll frame, but I have some concerns with its durability.

The first flaw is that the trailer’s handlebar doesn’t lock into place. When I picked up the bike trailer an inch or two to pull it around a gate or over a curb, the handlebar popped out, rotated, and plonked my children on the ground. When we had to lift the trailer over a log on the trail, my spouse and I picked the stroller up by its frame and ignored the handlebar altogether; it was just easier.

Burley assured me that you can tighten the clamp to lock the handlebar in place. However, in order to do so, you need to pop out the barrel nut that holds the handlebar in place. And if you tighten it too much, you might snap the handlebar’s cinch lever. As I pondered this conundrum, I couldn’t help but think that a sport trailer should be a little hardier than this.

I also wonder how long the Encore X will hold together. The fabric is made from tough 600-dernier polyester, but after a mere two weeks of being folded up and shoved in the back of my car, it has already started to wear through. The damage isn’t covered by the three-year warranty. Burley suggests a little Tenacious Tape might do the trick, but I’ve owned the Thule Chariot for three years and put it through similar paces, and its only signs of wear are fading from the sun.

The Thule Chariot’s accessories also just make more sense. For example, the Chariot’s two-wheel stroller kit is included in the base price, whereas with the Burley, the two wheel stroller kit is an add-on. The one-wheel stroller conversion kit might be more convenient in some ways, but I missed having two wheels. They make the stroller smaller and easier to maneuver, and I wouldn’t want to pay extra for them.

I was excited to test Burley’s sand- and gravel-riding kit, but I found that the big, fat, 16-inch tires were unnecessary. If you want to bike to the beach and push the stroller through sand, you have to buy the $149 jogger kit on top of the $199 fat tires. Without the jogger kit, the puny front tire sunk into the sand, tipping the stroller forward.

If you pick the Encore X, my advice is to skip the sand kit and stick with the ski kit for snow. Opt for the jogger kit if you want to go on sand or trails, or the two-wheel kit if you live in a city.

Encore Ready

If you want a one-and-done bike trailer that you can also hoist over a tree root without your children screaming, my vote would still be for one of the Thule Chariots like the one I recommended in our Best Strollers guide. Still, I found it to be a surprisingly difficult decision.

The Encore X has many admirable qualities, especially if you don’t go off-roading very much. It’s lighter and narrower, with much better storage options. With a few refinements to improve its durability, and a little Tenacious Tape, I might see a lot more of these on the roads and trails this summer.

Auto1 may consider IPO in future but no need for cash now: CEO

BERLIN (Reuters) – German used-car dealing platform Auto1 said it could seek a public offering in future but a 2018 cash infusion from Japan’s Softbank means it has no immediate need for extra funding of its European growth plans.

FILE PHOTO: A worker loads a second hand car on a car transporter truck at the Auto1.com company grounds in Zoerbig, Germany January 28, 2017.REUTERS/Fabrizio Bensch /File Photo

Last year’s Softbank’s deal valued Berlin-based Auto1 at 2.9 billion euros ($3.27 billion), making it one of Germany’s top so-called tech unicorns.

It is virtually unknown to consumers except through its used car buying arm Wir Kaufen dein Auto (We Buy Your Car) in Germany and similar names elsewhere. It operates from Finland to Romania to Portugal, 30 countries in all.

Revenues rose by 32 percent to 2.9 billion euros last year, and although it is profitable in Germany, investments in other markets have led to a loss on group level.

“Currently, an initial public offering is not a topic for us,” Auto1 co-founder Christian Bertermann told Reuters, adding this could change in future.

Auto1 buys cars using its vehicle pricing database to calculate an offer within minutes and then sells the vehicles on to one of its roughly 35,000 dealerships for a commission.

Its platforms helped 540,000 vehicles change hands in 2018.

The company will now also start a retail platform to compete with Scout24’s Autoscout unit or Ebay’s Mobile.de offering, Bertermann said.

He confirmed a Reuters report about Auto1’s talks with Scout24 about an acquisition of Autoscout, adding that these would not lead to a takeover.

Scout24 in February agreed to be acquired by buyout groups Hellman & Friedman and Blackstone.

Auto1 was set up in Berlin by entrepreneur Christian Bertermann after having trouble selling two old cars owned by his grandmother, along with Koc, who previously worked at Rocket Internet-backed firms Zalando and Home24.

Reporting by Nadine Schimroszik,; Writing by Arno Schuetze; Editing by Alexandra Hudson

Bahrain to use Huawei in 5G rollout despite U.S. warnings

DUBAI (Reuters) – Bahrain, headquarters of the U.S. Navy’s Fifth Fleet, plans to roll out a commercial 5G mobile network by June, partly using Huawei technology despite the United States’ concerns the Chinese telecom giant’s equipment could be used for spying.

FILE PHOTO: Logos of Huawei are pictured outside its shop in Beijing, China, February 28, 2019. REUTERS/Jason Lee/File Photo

Washington has warned countries against using Chinese technology, saying Huawei could be used by Beijing to spy on the West. China has rejected the accusations.

VIVA Bahrain, a subsidiary of Saudi Arabian state-controlled telecom STC, last month signed an agreement to use Huawei products in its 5G network, one of several Gulf telecoms firms working with the Chinese company.

“We have no concern at this stage as long as this technology is meeting our standards,” Bahrain’s Telecommunications Minister Kamal bin Ahmed Mohammed told Reuters on Tuesday when asked about U.S. concerns over Huawei technology.

The U.S. embassy in Bahrain did not immediately respond to a request for comment.

The U.S. Fifth Fleet uses its base in Bahrain, a Western-allied island state off the Saudi coast, to patrol several important shipping lanes, including near Iran.

Bahrain expects to be one of the first countries to make 5G available nationwide, Mohammed said, although he cautioned it would depend on handset and equipment availability.

Early movers like the United States, China, Japan and South Korea are just starting to roll out their 5G networks, but other regions, such as Europe, still years away and the first 5G phones are only likely to be released in the second half of this year.

Bahrain’s state controlled operator Batelco is working with Sweden’s Ericsson on its 5G network, while the country’s third telecom Zain Bahrain is yet to announce a technology provider.

No foreign company is restricted by the government from providing equipment for Bahrain’s 5G network, Mohammed said, adding that the mobile operators chose who they worked with.

Australia and New Zealand have stopped operators using Huawei equipment in their networks but the European Union is expected to ignore U.S. calls to ban the Chinese company, instead urging countries to share more data to tackle cybersecurity risks related to 5G networks.

Mohammed said the rollout of the 5G network was an “important milestone” for Bahrain, which is hoping investments in technology will help spur the economy which was hit hard by the drop in oil prices.

“It is something we are proud to have,” he said.

Reporting by Alexander Cornwell; Editing by Kirsten Donovan

AI cloudops is coming, whether you like it or not

As someone who’s worked with AI for the last 30 years (yes, it was a thing 30 years ago), I’ve often thought of its capabilities were overrated and used for the wrong things in many cases. Now that it’s cheap thanks to cloud computing, and much more effective thanks to the pace of innovation, AI as a solution is coming up again, including the use in cloud operations.

The idea is to replace people with AI to be both proactive and reactive to cloud operational issues such as outages, resource governance, security attacks, and performance. Cloudops involves largely repeatable problems, right?

There are of course some upsides and some downsides to this. Moreover, although the use of AI in cloud operations maybe a foregone conclusion, there will still be a learning curve that is required. As long as you understand that and know what to expect in terms of ROI for both the short term and long term, I’m okay with anything that that makes cloud operations more effective.

So, let’s look at the pros and cons.

The pros of AI for cloudops

The pros are that you can have a 7/24/365 monitoring and management program on the cheap. If you believe operational staff is expensive, try hiring them for shift work. AI-based monitoring and management systems never sleep, never take time off, and never ask for a raise. Once they are up and running, they cost almost nothing beyond their license fees and infrastructure costs. And they are self-learning at the same time; in other words, the more they run, the better that they get at the job.

Another pro is that these systems get smarter every day and share a common brain. People get smarter with experience as well, but they don’t do a good job sharing their experiences with others. People also retire and quit, with the knowledge and experience walking out the door with them.

The cons of AI for cloudops

One con is that the cost of rolling out these systems is high, even in the cloud. Vendors that have married AI and operational tools are going to charge a premium to get them up and running and in production. While the prices are all over the place, count on paying 50 percent more than for traditional tools, including consulting services for the first year or so to get the tools learning correctly.

Another con is that operations people don’t seem to like them no matter how well they perform. The number of passive-aggressive actions that I’ve seen over the years from people pushing back on AI-enabled operations tools has been huge.

They view this technology as not to be trusted, plus the fact that AI some day may displace their jobs does not make things better. Organizations that implement these tools need to have change agents, plus an understanding about the human factors with this technology.

Is the future AI-enabled cloud-operations tools? I don’t see how it won’t be. The pros will get better, and the cons will begin to diminish, like any other rollout of new technology. Hopefully, our new AI operations overlords will have mercy on us in a few years.