Should Investors Be Concerned Over Altria's Cigarette Volume Declines?

Introduction

I doubt there is any industry in history that has, or possibly ever will, create such vast amounts of wealth for their shareholders whilst facing a near constant onslaught as the tobacco industry. Even though smoking rates have been declining for decades, the strong price inelasticity of their products has allowed tobacco companies to continuously increase prices to offset lower volumes. Since they’re operating in an industry facing a secular decline, it’s critical to ensure their volume declines are remaining steady and thus able to be offset by price increases.

Earlier this year when Altria (MO) released their second quarter results, I was rather alarmed to see a year-on-year volume decline of 10.8%. Whilst this was largely a result of significant trade inventory movements, it prompted me to collect and analyse their historical cigarette volumes to provide context and ensure their recent volumes are within an expected steady secular decline rate.

Methodology

My methodology was quite simple, albeit time-consuming and involved collecting Altria’s quarterly domestic cigarette volume data dating back to 1994 from their SEC filings, linked further down. Whilst this date may appear rather arbitrary, it was the earliest date I was able to access and still provides ample data to analyse. I also collected the retail United States market share of their flagship Marlboro brand cigarettes, which have been the world’s top-selling brand since 1972.

After graphing this data, I was able to derive an exponential trend line, which should represent the expected secular decline rate for their cigarette volumes going forward. The R-squared value indicates the percentage of observations explained by the trend line, with a higher value being viewed favorably and allowing for more accurate judgments regarding their current and future volumes. If the secular decline in their cigarette volumes has been steady and predictable thus far, the R-squared value for the trend line should be quite high. A value of one is technically the maximum, however, this would be practically impossible to obtain.

Similar to all models, there are limitations with my model stemming from its reliance on historical data that may not necessarily be indicative of the future. Even though the trend line currently fits quite well, the future is unknown and various events could affect the accuracy of any projections. There are currently two events on the horizon that could materially affect Altria: the FDA’s proposed plans to lower nicotine levels and ban menthol cigarettes.

Whether either of these proposals will be legislated remains to be seen, however, in the case of the menthol ban, I feel the current fears are unjustified. I outline my thoughts on this topic in my recent article and whilst it centers on British American Tobacco (BTI), the same principals apply to Altria.

Results And Discussion

Altria Cigarette Volumes 1

Image Source: Author.

I initially began the model using Altria’s quarterly domestic cigarette volumes which are quite volatile, see above. It can be seen that despite the weakness earlier this year, their volumes never deviated from the trend line anymore significantly than during the past decades. Since more quarters of data have now been released, it can be seen their volumes have recovered and appear to be still tracking the expected secular decline rate. Finally, the R-squared value of 0.9067 indicates the trend line is explaining 90.67% of the observations and whilst I would consider this adequate, given the volatile data, I felt it could be improved.

Altria Cigarette Volumes 2

Image Source: Author.

To improve the accuracy of the model, I changed to using Altria’s annual domestic cigarette volumes, which removed a significant portion of the volatility and noticeably improved the R-squared value to 0.9503. Despite what appeared to be weak volumes earlier in the year, their annual volumes are very closely tracking the expected secular decline rate.

When calculating the annual volumes for 2018, I combined the first nine months with the previous model’s expected value for the fourth quarter. Since the first nine months was known, estimating the remaining three months has a minimal effect on accuracy. After reviewing this data, I noticed that from 1994 to 1997, their volumes were climbing year on year, which negatively affected the accuracy of the trend line.

Altria Cigarette Volumes 3

Image Source: Author.

The final step taken to improve the accuracy of the model was to remove the first three years and begin in 1997 when their cigarette volumes peaked. This improved the R-squared value even further to 0.9747 and indicates the vast amount of observations can now be explained by the trend line and thus future projections should prove accurate.

Aside from further supporting the notion their current volumes are still following the expected secular decline rate, it can now be observed their current volumes are actually slightly higher than expected. This implies their recent ‘weak’ volumes were a case of them returning to the expected results, rather than falling into the abyss. When evaluating their results in future reporting periods, I’ll continue using this model.

Based on the forecast provided by this model, it appears during 2030 Altria should still be selling approximately 71.9 million cigarettes annually. This represents an average yearly decline of 3.7% from my estimated 2018 volumes. Whether this will be adequate to support their current earnings remains unknowable, however, I believe this will be the case given their track history and the inelastic nature of their products. Since 1997, their domestic tobacco operating profit has increased 4.78% annually to 2017, despite their volumes declining 3.45% annually.

Altria Cigarette Volumes 4

Image Source: Author.

A final aspect I find interesting to review is the market share of their flagship Marlboro brand cigarettes in the United States market. Despite the recent stagnation, they have clearly grown in popularity over the long term and amassed an impressive market share of 43.2%. Even though they have occasionally taken a hit in the past, such as earlier this decade and the early 2000s, they have always bounced back.

Given their strong track history, I’m confident the managers running Altria will continue to maintain and hopefully grow their market share over the coming decade. Notes: Unless specified otherwise, all figures in this article were taken from Altria’s SEC filings contained in the following two links (1) (2) and all calculated figures were performed by the author.

Conclusion

To briefly summarize, I see no reason to be concerned about Altria’s cigarette volumes as thus far they are still in line with what I expect based on their historical secular decline trend. I will be concerned if their volumes begin consistently falling below this expected trend, however, there is no evidence of this occurring to date. Obviously, future events could upset this trend and whilst no one knows the outcome of the FDA’s recent proposals, I believe Altria will be capable of traversing any rough waters as they have consistently in the past.

Disclosure: I am/we are long MO, BTI.

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.

Apple CEO Tim Cook Just Revealed What He Does at 4 In the Morning. Here's Why More Business Leaders Should Do It

Absurdly Driven looks at the world of business with a skeptical eye and a firmly rooted tongue in cheek. 

A stagger to the bathroom, a quick shower and a wander to Starbucks?

That doesn’t seem to be quite Tim Cook‘s routine.

He gets up, he said, just before 4 a.m.

How can anyone do this on a regular basis? If I have to get up at four, it’s usually to catch a plane. It’s usually accompanied by a grisly mood and a desperate need for coffee.

It’s definitely not accompanied by an enthusiasm for work. Or even for thinking.

Cook, though, told Axios: 

I like to take the first hour and go through user comments and things like this that sort of focus on the external people that are so important to us.

Or how Cupertino only provides 5GB of cloud storage.

Would you enjoy starting your day listening to several thousand humans gripe into your ears, even if there are also a few praising your latest phones to the heavens?

Yet, if Cook is to be believed, he’s addressing the simplest core idea of running a business. 

If you don’t know what your customers are thinking about your product, how can you hope to please them?

No, I can’t believe he spends hours doing it. I do believe, however, that there are a lot of CEOs who rely on others in their company to tell them what customers think.

You might imagine that those others could be tempted to, well, edit the truth. Or, worse, to merely commission market research that’s riven with biases. 

As CEO, though, you can’t afford to let that happen. You can’t afford to distance yourself from your customers.

I can’t help, in this context, thinking about American Airlines CEO Doug Parker. 

Worse, he couldn’t believe why it would bother anyone that he hadn’t.

He left the impression that profits are the only thing he cares about. While many stared wide-eyed at his blindness toward humanity, Parker was steadfast.

Indeed, it was many months before he bothered to get on the MAX. His review was, well, tepid. He said it was:

In line with U.S. carrier main cabin products with a couple of pleasant surprises.

It was the same as the others, he felt, which meant he was happy.

It’s not as if Cook isn’t profit-oriented. Several people who regularly do business with Apple tell me he enjoys an extreme keenness on the money side of things.

However, he understands that his business depends on real people staying emotionally committed to his brand.

So he tries to make sure he’s aware of their feelings.

Even if the best time to do it is 4 a.m.

A Driver Returned to His Car to Find a Note and An Incredible Lesson on Doing the Right Thing. The Note Was From a 6th Grader

Absurdly Driven looks at the world of business with a skeptical eye and a firmly rooted tongue in cheek. 

A grasp of ethics is becoming slightly more popular in business these days.

Well, we can thank the Valley’s abject disregard for ethics, one that’s finally caught up with many of its companies. Why, even Stanford has begun to discover the concept.

Still, when you run a business you don’t always — often? ever? — expect people to do the right thing.

Which is, perhaps, why the story of Andrew Sipowicz and his car has moved so many this week.

He returned to his car last Monday, parked in Buffalo, New York, to experience a sinking feeling. 

He also experienced something he never expected.

His car, you see, had endured a substantial dent in its front left side. It seemed as if there had been a hit and a run. 

Yet perched inside his windshield wiper was a note. A very detailed note, as it happened, from a 6th grader.

The spelling wasn’t perfect. The sentiment certainly was.

It read: 

If your wondering what happen to your car.

Bus: 449 hit your car It stops here everyday to drop me off.

At 5:00pm.

What happened? She was trying to pull off and hit the car. She hit and run. She tried to vear over and squeeze threw but couldn’t. She actually squeezed threw. She made a dent and I saw what happened.

-Sorry

-Driver seat left door

-A lady in the bus driver seat 499.

-Buffalo Public School bus

-A 6th grader at Houghten Academy

It sets a good example for a lot of students. Not just students, but just people in general.

What resulted is that the bus company is covering the cost of repairs and giving Sipowicz a loaner car. The bus driver, reports CNN, will be fired.

We get wrapped up in the bad deeds of companies because they appear to have such large consequences.

At heart, though, the bad deeds of companies are merely the bad deeds of individuals, written in capital letters and involving large amounts of capital.

Yet simple stories of goodwill also spread around the web, as this one has. 

It’s almost as if people want to be reassured that, in the midst of a world that seems to bathe delightedly in corruption, there still are good people. 

That story led to unexpected consequences and national attention. 

These days, we watch as so many who could say something, end up saying nothing.

We’re told that kids don’t bother with anything but themselves, buried as they are in their phones. 

Here, though, is a simple lesson of a 6th-grader who stopped, looked around and did the right thing. A generous thing.

Perhaps we should all do that a little more often.

Google reveals new policy for election ads ahead of EU vote: Bloomberg

An illuminated Google logo is seen inside an office building in Zurich September 5, 2018. REUTERS/Arnd WIegmann

(Reuters) – Alphabet Inc’s Google said it will roll out new policies in Europe to provide more transparency around political ads, ahead of European Union elections in the spring, Bloomberg reported on Wednesday, citing a blog post.

According to the report, Google said it would require advertisers to submit an application and receive verification before they can pay for political ads.

Google did not immediately respond to a request for comment.

The European Commission said in September that Facebook Inc, Google and other tech firms had agreed a code of conduct to do more to tackle the spread of fake news, over concerns it can influence elections.

Google also said it would publish an EU transparency report, along with a searchable ad library, to provide more information about who is purchasing election ads, for how much, and to whom they are targeted, Bloomberg reported.

Public databases that shine a light on online political ads – launched by Facebook and Google before U.S. elections – offer the public the first broad view of how quickly the companies yank advertisements that break their rules.

Reporting by Akanksha Rana in Bengaluru; Editing by Leslie Adler

10 Common Tax Scams and How to Avoid Them

  • Every tax season, there are criminals trying to scam innocent people out of some of their money.
  • Bogus, aggressive phone calls demanding payment and “phishy” emails taking you to scam sites are still the most prevalent scams, but there are some new tactics, and some lesser-known scams to be wary of too.
  • Business Insider spoke with three CPAs to get the inside scoop on scams to watch out for this year.

But there’s another group getting revved up for the tax season: Fraudsters.

These criminals can try to scam you in person, over the phone, or, most popularly, through email.

Business Insider spoke with three CPAs to help prepare you to look out for — and avoid — tax-season scams.

1. Phishing emails

1. Phishing emailsThomson Reuters

The IRS, other government agencies, and banks have been warning us about these emails for years, but they continue to be a problem. Some of these fraudulent emails will look like they are from the IRS or a bank and will ask you to visit their site and “update your account,” according to the IRS. The page will look official, and criminals are hoping you’ll enter your private information so they can use it to steal your identity, file a fake tax return in your name, or open new accounts without your knowledge.

There is a new twist on the theme this year. Fraudsters are sending emails pretending to be a professional association you might belong to, “like the state societies of opticians, or lawyers, or any other profession,” Melanie Lauridsen, senior manager for tax policy and advocacy at the American Institute of CPAs (AICPA) told Business Insider.

Criminals will often use the official name of a professional association, or a very similar name, according to Lauridsen. The email will say that you need to login to update your information, such as licensure or registration info, and get you to enter other sensitive information. This leaves you vulnerable to identity theft or other fraud.

2. Phone calls from the “IRS”

“More and more of my clients have been getting random phone calls from scammers claiming to work for the IRS,” Chad Elkins, CPA and author of “Elkins’ Tax Guide 2019 Edition,” told Business Insider. The IRS will almost never make initial contact with you by phone.

“They like to target the elderly and recent immigrants, in particular, who may not be aware that the IRS will never call to demand immediate payment, nor contact taxpayers about taxes owed without first corresponding by mail or providing the taxpayer an opportunity to appeal a balance due,” Elkins said.

These scammers have gotten sophisticated, according to the IRS. Now, they can spoof the local IRS Taxpayer Assistance Center (TAC) phone number to appear on your caller ID. If you doubt them, the scammers will tell you to look up the number.

The IRS does not do anything immediate — they have a process of warning letters, registered mail, and other paper information before they demand money. To collect the money owed, the IRS can file a tax lien on your home, levy your bank account or wages, or offset any refund you are entitled. Eventually, they can seize your car, boat, or real estate if you don’t pay up. They have the force of the law behind them to eventually collect any money that you might legitimately owe them.

3. Using your Social Security number to file a tax return and steal your refund

3. Using your Social Security number to file a tax return and steal your refundiStock/Getty Images Plus

Whether criminals have gotten your information from hacking, data breaches, or by using a phishing email that you fell for, if they have your social security number and other vital data about you, they can file a return in your name, according to Lindsey. “The scammers often get the refund put onto prepaid debit cards instead of being deposited in bank accounts because it’s a lot harder to trace once the payment has been made,” Lindsey said.

“We saw it at the height for our clients in 2017,” Lindsey said, but the number of incidents has been declining since then. If you can file early, this reduces your chances of having this scam pulled on you.

4. Fees based on your return amount

4. Fees based on your return amountAP Photo/Nam Y. Huh

“If a tax preparer says they can get you a $6,000 refund and will charge 10% of that for their fee, be suspicious,” Lauridsen said. “Preparers should charge based on how much work it takes to do your return, not the amount they can get you as a refund. The IRS may quickly refund you the $6,000, but when they figure out that you don’t have three extra children, huge donations to charities, or other sneaky tricks, the IRS will want that money back.”

By then, that preparer will be long gone with your $600, while you’ll be on the hook for paying back the IRS. No matter who you go to for tax preparation help, the amount of your refund shouldn’t vary by much.

5. Pop-up tax preparers

5. Pop-up tax preparersJustin Sullivan/Getty Images

“With the in-person scam we often see fraudulent tax preparers. The preparer creates a business out of thin air and reports a loss on your tax return in order to inflate your refund.” Lindsey said. “I’ve seen this scam happen to several law-abiding citizens, including police officers.

“The best defense is to know who is preparing your return and to actually look over your return before filing it,” Lindsey continued. “You don’t have to understand every nuance of the tax law, but you should know if you had a side gig or not.”

6. Harvesting information from hotspot or public WiFi networks

6. Harvesting information from hotspot or public WiFi networksJustin Sullivan/Getty Images

Anyone can harvest your data on a public WiFi network. Don’t file your taxes from Starbucks or McDonalds. Don’t bank from there either. If you are a professional who works with sensitive data, use a VPN if you need to work while traveling. Then, when you log in from the airport or the coffee shop, you have safeguarded the information you are accessing.

7. Prize and trip email scams

“You have not won anything, so do not click on that link,” Lauridsen said. People get fooled every day, click on a link, and then the criminals can be inside your company’s computer system, able to get to all kinds of files, from employee information to customer data. Stop and think about it very carefully before you click on any link in an email — it might download malicious software that allows outsiders to access your private data.

8. Tricking businesses to release data

“As the IRS has better filters in place to avoid identity theft, scammers have had to resort to going to businesses to try to get information to commit their various types of fraud.” Lauridsen told us of one common scenario: “The ‘CEO’ of the company sends an email to the HR department, asking for sensitive data for all employees.”

“Not wanting to question the CEO, someone in HR sends out a spreadsheet with all the employees’ complete information — social security numbers, bank account numbers, tax information, addresses, etc,” Lauridsen continued. “But really, it was a scammer having hacked or spoofed the CEO’s email account.”

If you get a suspicious request that is out of the ordinary, especially when it relates to personal data on employees, take the time to verify it through another channel. “You want to impress the boss, but be aware that scammers are able to make it look like they are using internal email accounts,” Lauridsen said. It should be pretty easy to pick up the phone and check out the request. You may be the hero who averts a major data breach at your company.

9. Tax preparers getting hacked

Because there are more robust identity theft filters in place, criminals are specifically targeting tax professionals with phishing emails posing as the IRS or software companies.The IRS warns that fraudsters are working to hack into CPA and tax preparer computers to steal their client information. All financial professionals need to have good cybersecurity installed and working to keep out intruders. In addition, there are programs that will automatically log you out if you step away from your computer for a few minutes — this is much safer than leaving the data open and available on your computer.

10. Fake tax bills through the mail

10. Fake tax bills through the mailREUTERS/Carlos Barria

Even though most IRS contact with taxpayers is through the mail, some mail might be a scam. “The IRS will generally contact taxpayers by regular mail before any other contact is made, and even that can be suspicious, because a growing scam involves fraudsters sending out phony tax bills through the mail on what looks like official IRS letterhead,” Elkins writes in his tax guide. “If you think you don’t owe any tax or don’t owe the amount shown on the bill, be careful not to fall for this scam. You should check with the IRS before paying any bill that looks suspicious.”

7 Ways You Need to Organize Your Desktop (and Your Life)

If your computer is cluttered with disorganized files and unnecessary apps, it’s tough to get any work done. Not only will you find it harder to find the content you need when you need it, but you’ll also feel additional stress, and may also be more easily distracted.

Still, most people find it challenging to organize their computer desktop in a meaningful, intuitive way.

You can start by acknowledging the main challenges that get in the way of an organized desktop:

  • Choosing a standard. If you don’t have an idea how to organize your files, you’ll never get started. The analysis paralysis on deciding on an organizational method can kill some efforts before they even begin.
  • Clearing the clutter. Clutter has a powerful effect on your stress and emotional wellbeing, but it’s hard to delete files if you think there’s a chance you’ll use them again in the future. It’s very easy for a computer to become cluttered with unnecessary items.
  • Finding the time. It’s almost impossible to automate the process of organizing your desktop, which means you’ll need to make time to do it manually–time many workers feel they don’t have.
  • Staying consistent. Once you decide on an organizational standard, you’ll need to stay consistent in applying that standard in the future. This is where most people fail.

Now let’s focus on strategies you can use to get–and stay–organized:

1. Consolidate your most important apps.

First, take inventory of the apps that are most important for your position. You might have three or four that you use on a daily basis, or a subscription suite of software programs that provide you with most of the functionality you need. For example, you might be able to merge functions from multiple apps with a single, comprehensive solution, or use a single suite of apps to replace the hodgepodge collection you accumulated over time.

2. Delete or tuck away what you don’t use at least weekly.

Next, start decluttering whatever you can. If you can’t remember the last time you used an app, uninstall it. If you can’t imagine a scenario when you’ll need a specific file, delete it. If you’re struggling with the decision, but it seems like it might be unnecessary, create a folder where you can store these rarely accessed files and apps–then tuck that folder out of the way.

3. Decide on a file naming convention.

Next, decide on a naming convention for your files that you can use consistently. For example, you might code each file with the date, so they’re listed in chronological order, then include the name of the client each file pertains to, so you can quickly search by client. Start renaming any files that don’t already adhere to this convention, and make notes so you can use it consistently in the future.

4. Create a system of folders and subfolders.

Try to keep every file on your computer or in your cloud storage account in a strictly organized system of folders and subfolders. You should have a handful of “main” folders (like Documents, Artwork, or Templates), and several subfolders within those main folders based on clients or the specific types of files contained within. There may be some files that belong in multiple categories; for these, you’ll need to make an individual judgment call, and remember, you can always run a search if there’s something you can’t find.

5. Customize your background.

If you want your desktop to be even more intuitively organized, consider creating a custom background, divided into clear sections. For example, you might designate the left side of your screen for your “most used apps” and the middle for “frequently accessed files.”

6. Take the extra time to sort new content.

It’s tempting to dump new files onto your desktop haphazardly when you’re in a rush, but if you want to stay organized, you’ll need to commit to making the time to keep all new files and apps in the proper order (and with the proper naming conventions). It takes a few minutes at most, so it shouldn’t be much of a commitment.

7. Schedule a recurring cleaning session.

As long as your calendar isn’t already packed with reminders and to-dos, schedule a recurring session to re-clean your desktop to keep it from overflowing. Scheduling something once a week, or even once a month, can prevent your desktop from becoming cluttered again.

Once your desktop is sufficiently organized, you’ll find it much easier to find what you’re looking for, you’ll feel revitalized, and you might even find yourself in a better mood throughout the workday. It might take an investment of time to get organized, but the end results are worth it.

How Blockchain Technologies Can Enhance Cross-Industry Transparency

Now, blockchain technologies are poised to enhance cross-industry transparency via improvements to charity and donation programs.

I spoke with Changpeng Zhao, CEO of the cryptocurrency exchange company Binance, which runs the Blockchain Charity Foundation (BCF)–a wing of the company that’s devoted to global sustainable development. He shared how blockchain technologies can enhance transparency within a huge range of industries by making donation and charity systems easier to track and understand.

The Trouble with Current Donation Systems

There are so many disparate industries these days that it can be challenging to find any commonalities beyond death and taxes. But here’s one thing most industries have in common: At least some people and organizations within said industries are likely to participate in charity or donation programs.

That’s good news for society, but there’s just one problem: Donation systems notoriously lack transparency, which can lead to corruption and wear down the public’s trust–thereby decreasing the odds that people and organizations will continue to donate to worthy causes.

After piloting disaster relief donations via a campaign for West Japan flood donation, Zhao is intimately familiar with the lack of transparency that pervades so many charity programs.

“It was quite hard to push money to the ultimate beneficiaries–to identify who they are and who needs help,” Zhao says. Because the process of collecting and distributing donations is generally an opaque one, Zhao says not many people can understand where the money goes unless they’re provided with a detailed written report.

“Everyone sees one layer of transaction,” Zhao says. “The people who donated to us trust us to make good use of the money, but they no longer know where the money went until we publish that report.”

Zhao is concerned this can limit people’s willingness to donate. “In addition to being worried that the money may or may not be put to good use, the lack of transparency also reduces the sense of personal achievement,” he says. “If you can see where the money is going, that will help a lot in terms of personal feelings of achievement–so that’s very important.”

All of this helps explain why the BCF is committed to developing a fully transparent charity platform.

Making Charity Programs More Transparent

Zhao and his BCF maintain that employing blockchain technology within the charity ecosystem will yield a more efficient and transparent system and enhance the odds that donations will be distributed to those most in need.

“When it comes to the BCF program, our aim is to focus on transparency through this tracking portal,” Zhao says. “We want a completely transparent system.”

“Looking at the UN Sustainable Development Goals, the first few in the list could all be easily enhanced with a more transparent charity program,” Zhao says. “This increased transparency will prompt people to donate more and that will help a number of the initiatives including poverty, health, quality of education, gender equality and more.”

Rather than advocating for a specific charity, the BCF aims to help all charity initiatives via its blockchain charity platform.

Making Donation Systems More Transparent

In order to establish a fully transparent charity system, it’s necessary to track donations through multiple layers of donors, charity programs, NPOs, local supporters, and the ultimate beneficiaries.

That’s a tall order, but Zhao says Binance’s blockchain donation portal is capable of achieving it.

“As long as all of the transactions stay on-chain (done via cryptocurrency), blockchain tracks everything automatically,” Zhao says. “The job of the BCF portal is to collect the information on the blockchain and present it in an easy to understand manner. You can see the number of transactions of the incoming donations and the number of outgoing transactions for beneficiaries. And in between these two, there could be multiple layers for NPOs, local partners… etc., so we can track all of those in an easy to visualize way.”

The emphasis here is on easy to understand. Revealing oodles of data in and of itself doesn’t enhance transparency; it’s making that data accessible and understandable by all parties involved that provides greater clarity within donation systems.

The Importance of Education

In order to onboard more charitable organizations, governments, corporations, and grassroots communities, Zhao says the BCF first has to educate people about the value of the blockchain and cryptocurrencies.

The foundation is approaching this effort in several ways. For starters, the BCF is beginning to partner with universities and governments to educate teens and university students about cryptocurrency, blockchain, and so on.

“We also try to push very hard for the ultimate beneficiaries to accept cryptocurrency, so that will be a good way [for] people to learn,” Zhao says. “If users receive donations via crypto and these users need to learn about cryptocurrency or require help installing a wallet to receive the donation, there is a high incentive to learn that.”

Zhao is also hopeful that an increasing number of people and organizations from far-ranging industries will get on board with the blockchain in pursuit of a transparent charity platform.

“There [are] a lot more people that understand blockchain… [compared to a] few years ago, so today it is easier to push,” Zhao says. “I think the most significant challenge in expand[ing] BCF’s impact is really just educating people on blockchain. The more people who understand blockchain, the easier it is for BCF to push our impact.”

Who Should Sit on Facebook’s Supreme Court? Here Are 5 Top Candidates

Facebook CEO Mark Zuckerberg said this week the company will create an oversight board to help with content moderation. The move is a belated acknowledgement Zuckerberg is out of its depth when it comes to ethics and policy, and comes six months after he first floated the idea of “a Supreme Court … made up of independent folks who don’t work for Facebook.”

The idea is a good one. If carried out properly, a “Supreme Court” could help Facebook begin fixing the toxic stew of propaganda, racism, and hate that is poisoning so much of our political and cultural discourse.

But how would a Facebook Supreme Court actually work? Zuckerberg has offered few details beyond saying it will function something like an appeals court, and may publish some of its decisions. Meanwhile, legal scholars in the New York Times have suggested it must be be open, independent and representative of society.

As for who should sit on it, it’s easy to imagine a few essential attributes for the job: The right person should be tech savvy, familiar with law and policy, and sensitive to diversity. Based on those attributes, here are five people that Facebook should select if it is serious about creating an independent Supreme Court.

Zeynep Tufekci

(Julia Reinhart/ Getty Images)

(Julia Reinhart/ Getty Images)

A Turkish sociologist and computer programmer, Tufekci was one of the first to raise the alarm about the moral and political dangers of social media platforms. She is a public intellectual of the internet age, using forums like the New York Times and Harvard’s Berkman Center to denounce Silicon Valley’s failure to be accountable for the discord it’s fostered. Tufecki has also taken aim at Facebook’s repeated use of “the community“—a term that is meaningless to describe 2 billion users—to defend its policies.

Peter Thiel

(Photo by Stephanie Keith/Getty)

(Photo by Stephanie Keith/Getty)

An iconoclast who has built several public companies, Thiel is also a lawyer who started the venture capital firm Founders Fund. A gay conservative and a supporter of Donald Trump, Thiel is deeply unpopular with Silicon Valley’s liberal elites—which is why his appointment would ensure ideological diversity on Facebook’s Supreme Court. Thiel is an early investor in Facebook and a longtime board member, which gives him a deep knowledge of the company. He would have to give up these positions to preserve the body’s independence.

Judge Lucy Koh

Koh has presided over numerous high-profile technology trials and is highly regarded in Silicon Valley. Her work as a federal judge includes the long-running patent trial between Apple and Samsung, as well as a case involving an antitrust conspiracy between Google, Adobe, and other firms. Her work on the bench and inspiring personal biography made her the subject of a flattering 2015 Bloomberg profile. Koh’s familiarity with the political and legal strategies of tech giants would provide invaluable expertise for Facebook’s Supreme Court (provided federal ethics rules permitted her to do so).

Tim Berners Lee

(Nicolas Liponne via Getty)

(Nicolas Liponne via Getty)

Sir Berners Lee is a computer science professor at Oxford University and MIT, who is best known as the inventor of the World Wide Web. Highly regarded in tech circles for his humility and vast knowledge, Berners Lee in recent years has become a vocal critic of the advertiser-based business models of the Silicon Valley tech giants. Appointing him to Facebook’s Supreme Court would show the company is serious about fixing its systemic problems with privacy.

Bozoma Saint John

(Wesley Hitt/Getty Images)

(Wesley Hitt/Getty Images)

Saint John, who was raised in Ghana, became a familiar name in tech circles when she became Apple’s head of music marketing after the company acquired her former employer Beats. She also worked at Uber before moving to the talent agency Endeavour. Saint John’s outspoken views on Silicon Valley’s white male culture would help inform Facebook’s Supreme Court in tackling hard issues of diversity.

Why We Need Women to Have a Larger Role in Innovation

Every once in a while I get a comment from an audience member after a keynote speech or from someone who read my book, Mapping Innovation, about why so few women are included. Embarrassed, I try to explain that, as in many male dominated fields, women are woefully underrepresented in science and technology.

The preponderance of evidence shows that women can vastly improve innovation efforts, but are often shunted aside. In fact, throughout history, men have taken credit for discoveries that were actually achieved by women. So, while giving women a larger role in innovation would be just and fair, even more importantly it would improve performance.

The Power of Diversity

Over the past few decades there have been many efforts to increase diversity in organizations. Unfortunately, all too often these are seen more as a matter of political correctness than serious management initiatives. After all, so the thinking goes, why not just pick the best man for the job?

The truth is that there is abundant scientific evidence that diversity improves performance. For example, researchers at the University of Michigan found that diverse groups can solve problems better than a more homogenous team of greater objective ability. Another study that simulated markets showed that ethnic diversity deflated asset bubbles.

While the studies noted above merely simulate diversity in a controlled setting there is also evidence from the real world that diversity produces better outcomes. A McKinsey report that covered 366 public companies in a variety of countries and industries found that those which were more ethnically and gender diverse performed significantly better than others.

The problem is that when you narrow the backgrounds, experiences and outlooks of the people on your team, you are limiting the number of solution spaces that can be explored. At best, you will come up with fewer ideas and at worst, you run the risk of creating an echo chamber where inherent biases are normalized and groupthink sets in.

How Women in Particular Improve Performance

While increasing diversity in general increases performance, there is also evidence that women specifically have a major impact. In fact, in one wide ranging study, in which researchers at MIT and Carnegie Mellon sought to identify a general intelligence score for teams, they not only found that teams that included women got better results, but that the higher the proportion of women was, the better the teams did.

At first, the finding seems peculiar, but when you dig deeper it begins to make more sense. The study also found that the high performing teams members rated well on a test of social sensitivity and took turns when speaking. Perhaps not surprisingly, women do better on these parameters than men do.

Social sensitivity tests ask respondents to infer someone’s emotion by looking at a picture (you can try one here) and women tend score higher than men. As for taking turns while in a conversation, there’s a reason why we call it “mansplaining” and not “womensplaining.” Women usually are better listeners.

The findings of the study are consistent with something I’ve noticed in my innovation research. The best innovators are nothing like the mercurial, aggressive stereotype, but tend to be quiet geniuses. Often they aren’t the types that are immediately impressive, but those who listen to others and generously share insights.

Changing The Social Dynamic

One of the reasons that women often get overlooked, besides good old fashioned sexism, is that that there are vast misconceptions about what makes someone a good innovator. All too often, we imagine the best innovators to be like Steve Jobs–brash, aggressive and domineering–when actually just the opposite is true.

Make no mistake, great innovators are great collaborators. That’s why the research finds that successful teams score high in social sensitivity, take turns talking and listening to each other rather, rather than competing to dominate the conversation. It is never any one idea that solves a difficult problem, but how ideas are combined to arrive at an optimal solution.

So while it is true that these skills are more common in women, men have the capacity to develop them as well. In fact, probably the best way for men to learn them is to have more exposure to women in the workplace. Being exposed to a more collaborative working style can only help.

So besides the moral and just aspects of getting more women into innovation related fields and giving them better access to good, high paying jobs, there is also a practical element as well. Women make teams more productive.

Building The Next Generation

Social researchers have found evidence that that the main reason that women are less likely to go into STEM fields has more to do with cultural biases than it does with any innate ability. For example, boys are more encouraged to build things during play and so develop spatial skills early on, while girls can build the same skills with the same training.

Cultural bias also plays a role in the amount of encouragement young students get. STEM subjects can be challenging, and studies have found that boys often receive more support than girls because of educators’ belief in their innate talent. That’s probably why even girls who have high aptitude for math and science are less likely to choose a STEM major than boys of even lesser ability.

Yet cultural biases can evolve over time and there are a number of programs designed to change attitudes about women and innovation. For example Girls Who Code provides training and encouragement for young women and UNESCO’s TeachHer initiative is designed to provide better educational opportunities.

Perhaps most of all, initiatives like these can create role models and peer support. When young women see people like the Jennifer Doudna, Jocelyn Bell Burnell and the star physicist Lisa Randall achieve great things in STEM fields, they’ll be more likely to choose a similar path. With more women innovating, we’ll all be better off.

Amazon Announces a Security Change That May Help Companies Using AWS to Avoid Data Breaches

Amazon is finally offering a simple way for its cloud services customers to lock down data stored at its Simple Storage Service (S3) with one fell swoop. This change should help companies in the Fortune 500 and mom-and-pops down the street avoid embarrassing breaches of data.

Customers of Amazon Web Services (AWS) routinely leave private files available for public consumption. That’s led to routine, sometimes costly situations for companies that find hackers or security researchers have retrieved customer information, databases containing user passwords, or even proprietary company secrets.

That includes the global consulting and management firm Accenture, which in October 2017 left four of its S3 storage areas, known as “buckets,” open to public examination and download. Over 137 gigabytes of data could have been retrieved, including 40,000 unencrypted passwords. Accenture’s cloud platform, hosted on Amazon’s services, include 92 of the Fortune Global 100 and three-quarters of the Fortune Global 500. A security researcher discovered the public data and informed Accenture.

In August 2018, a researcher discovered that a company that sells surveillance software it markets for parents, Spyfone, left an Amazon S3 bucket publicly available, and intimate and personal data extracted from thousands of people its customers were monitoring were exposed, according to Motherboard. This included several terabytes of camera photos.

Last November, Amazon released a change that gave system administrators better notification about any storage buckets set to public access, using an orange label in its file-browsing dashboard.

The change released on Nov. 16, however, allows top-down control for an entire storage area, including disabling overrides for individual folders or files within it. This will prevent companies from leaving data open for global snooping—if they’re attentive enough to know about the new feature and enable it.

The number of security breaches due to customer settings at Amazon S3 has been so high that articles at tech sites devote themselves to listing them all.

Notable breaches include Uber, which exposed personal data of about 57 million customers in October 2016, and didn’t disclose the matter [until November 2017](Dara Khosrowshahi), after it had hired a new CEO; Deep Root Analytics, which exposed personal data on 198 million American voters; and the WWE wrestling entertainment firm, which exposed personal details of 3 million of its fans.