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'Angel Has Fallen' continues to take advantage of the quiet late summer box office

Sun, 09/01/2019 - 11:14am  |  Clusterstock

  • "Angel Has Fallen" won the Labor Day weekend box office with an estimated $11.5 million ($14.5 million by Monday).
  • It is the second-straight weekend the movie has topped the domestic box office.
  • The 2019 summer box office came in two percent below last year's season, according to Comscore.
  • Visit Business Insider's homepage for more stories.

Recently Labor Day has been the holiday weekend big studios have wanted no part of. And that continues this year.

With Warner Bros.' "It Chapter Two" opening next weekend, all the majors are staying clear of releasing new movies at the multiplexes this weekend, which has led to Lionsgate/Millennium winning the domestic box office for a second consecutive week with "Angel Has Fallen," the third movie in the Gerard Butler-starring franchise.

  • The action thriller earned $11.5 million this weekend.
  • It's projected to earn $14.5 million by Monday.
  • The movie brought in $21.3 million last weekend.
  • Should estimates hold, "Angel Has Fallen" will have a domestic cume of $43.6 million by the end of Monday.

This marks the close of the 2019 summer box office season that came in two percent below last year's season, according to Comscore (via The Hollywood Reporter).

A big reason for the decline is because there was zero consistency. Outside of the big Disney releases like "Avengers: Endgame," "Aladdin," "Toy Story 4," and "The Lion King" (which all went on to earn over $1 billion globally), successful summer titles were few and far between — "Spider-Man: Far From Home," "Fast and Furious Presents: Hobbs and Shaw," "Once Upon a Time... in Hollywood." That left lots of underperformers and failures like "Dark Phoenix," "Godzilla: King of the Monsters," "Men in Black: International," and indies "Booksmart" and "Late Night."

Read more: I went to the opening of Star Wars: Galaxy's Edge at Disney World and it was very different than how things were done at Disneyland

A studio could have taken a chance and released a title it thought could do better business than "Angel Has Fallen" the last two weekends, but instead they all pulled their chips and are preparing for the fall.

It will begin with "It Chapter Two" next weekend by Warner Bros., which is projected to bring in some major coin. Following that are titles that are already gaining award season buzz like Fox's "Ad Astra" starring Brad Pitt on September 20, and "Joker" (also a Warner Bros. release) on October 4.

What the "Angel Has Fallen" trailer below:


SEE ALSO: The 13 best Stephen King movie adaptation, according to critics

Join the conversation about this story »

NOW WATCH: Tobey Maguire's 'Spider-Man' is a classic, even though it's one of the more under-appreciated superhero films

A recalled MacBook Pro has been banned on more than a dozen airlines — here are the carriers that won't let you bring the laptop on board

Sun, 09/01/2019 - 10:49am  |  Clusterstock

  • The Federal Aviation Administration in August that it was banning certain models of the Apple MacBook Pro from flights.
  • The ban applies to 15-inch MacBook Pro units primarily sold between September 2015 and February 2017. Apple said the battery in the affected laptops can overheat, potentially swelling or igniting.
  • Affected units are neither allowed on flights inside carry-on luggage or in checked baggage.
  • These are the airlines, agencies, and countries that have banned or restricted the recalled MacBook Pro from flights.
  • Visit Business Insider's homepage for more stories.

The Federal Aviation Administration announced in August that it was banning certain models of Apple's MacBook Pro from being brought on board flights, whether as cargo, or in passengers' carry-on luggage.

The recall, which Apple announced in June, applies to 15-inch MacBook Pro units primarily sold between September 2015 and February 2017. Apple said the battery in the affected laptops can overheat, potentially swelling or igniting.

In a statement, the FAA said it was "aware of the recalled batteries that are used in some Apple MacBook Pro laptops" and reminded airlines to follow safety guidelines issued in 2016 about consumer electronics with recalled batteries.

According to those guidelines, electronics with recalled batteries should not be allowed on flights as cargo or in carry-on luggage. That would apply to the affected MacBook Pros.

In addition to the FAA, a number of airlines and regulatory bodies throughout the world have issued guidance relating to the hazardous laptops.

Scroll down for a list of airlines, agencies, and countries that have banned or restricted the recalled MacBook Pro from flights.

To see if your laptop is affected, visit Apple's recall page and enter the serial number, which can be found by clicking the small Apple logo in the upper-left corner of the menu bar and then clicking "About This Mac."

SEE ALSO: Apply here to attend IGNITION: Transportation, an event focused on the future of transportation, in San Francisco on October 22.

The United States.

The FAA ban means that US airlines, including cargo carriers, and airlines flying to or from the US should not allow the laptops on board.

European Union Aviation Safety Agency

The European Union said that the MacBook Pro models should be switched off and not used during flights. It stopped short of a full ban like its US counterpart, though the agencies often align on such safety notices.


TUI Group Airlines banned the affected laptops from being carried as cargo, or being brought in the passenger cabin, according to Bloomberg.

Thomas Cook

Tour operator Thomas Cook also banned the laptops from its flights.

Air Transat

Canadian airline Air Transat also banned the laptop.

Air Italy

Air Italy similarly banned the affected model.


Australian airline Qantas banned all 15-inch MacBook Pro computers from checked luggage, including unaffected models. While it continued to allow the laptop in carry-on bags, passengers must leave it switched off during flight.

Virgin Australia

Virgin Australia went a step further, banning all Apple MacBooks, regardless of model or size, from checked baggage, although it still allows them in the cabin.

Singapore Airlines

Singapore's ban includes the checked luggage and the passenger cabin.

Thai Airways

Star Alliance carrier Thai Airways said that the affected laptops could not be brought on board at all, unless the battery had been replaced already.


Etihad banned all MacBook Pro computers, regardless of size or model, from checked luggage. They can still be brought in the passenger cabin.

10 charts that show why the economy feels so bad — even though it sounds so good

Sun, 09/01/2019 - 10:34am  |  Clusterstock

Although there are some clouds on the horizon hinting at a possible recession, most of the major US economic indicators are pretty strong right now.

Economic growth is steady, the unemployment rate is extremely low, and the stock market has massively rebounded since the last financial crisis.

Read more: Here's why the economy feels so bad when it sounds so good

But despite that, many Americans feel left out of the apparent boom. Rising costs and debt, stagnant wages, and high and rising inequality create a sense of a two-track economy, where the winners get richer and everyone else has to run faster just to stay where they are.

Here are 10 charts that break down why people are struggling, even when the economy appears so strong.

SEE ALSO: This chart shows every recession the US has gone through since 1960, and how they compare to the economic meltdowns of other countries

Many of the top-line metrics used to judge how the US economy is doing look pretty good right now. Gross domestic product, a broad measure of overall economic activity, has been growing steadily for years, although recent revisions suggest that growth was not as robust as originally believed.

The revisions suggested that growth in 2018 was closer to 2.5% rather than the initially touted 3%, as reported by The New York Times.

The unemployment rate has been steadily dropping since the end of the Great Recession. It is now lower than it has been in decades.

At its peak in October 2010, unemployment in the US topped out at 10.0%. As of July 2019, that number has decreased and now stands at 3.7%.

In the last several years, the economy has steadily added around 200,000 jobs per month.

The monthly change in non-farm payroll employment is one of the most widely watched economic figures in the US. Since January 2012, the US has been steadily adding jobs each month at an average rate of about 203,000 per month.

A few years before the start of the above chart, however, things were much more dire. In the depths of the Great Recession in 2008 and 2009, the economy was losing hundreds of thousands of jobs each month as businesses ground to a halt in the wake of the 2008 financial crisis.

In March 2009 alone, employment in the US fell by 803,000 jobs.

Other measures of labor market health, however, have been improving in recent years — but they suggest a somewhat less rosy picture.

The prime-age labor force participation rate measures the share of adults aged 25 to 54 who are either working or actively looking for work.

It shows how many people are either employed or fit the Bureau of Labor Statistics' official definition of unemployment, and so a drop in this rate indicates an increase in the number of people who aren't working and have stopped trying to find a job.

While this measure is up from its deepest post-recession lows, it remains below where it was for most of the 2000s, suggesting that many adults in their prime working years remain sidelined from the workforce.

But many Americans haven't seen the advantages of a growing economy.

As shown in the chart above, when adjusted for inflation to 2019 dollars, real average wages have been mostly stagnant for decades.

Another big factor in why the economy might not feel as good as it looks is the rising cost of entering and staying in the middle class.

College tuition has risen at a much higher rate than overall inflation for decades.

Several factors have contributed to the massive increase in college costs, and the situation is set to only get worse.

Read more: College is more expensive than it's ever been, and the 5 reasons why suggest it's only going to get worse

One of the consequences of that rise in college tuition is a massive increase in student debt.

Americans now collectively owe nearly $1.5 trillion in student loans, more than six times the outstanding debt load at the start of 2003.

The student debt crisis has gotten bad enough that many borrowers still owe money into their sixties, and many younger adults have put off major life milestones like having children because of their debt load.

Read more: 10 mind-blowing facts that show just how dire the student-loan crisis in America is

Other costs have skyrocketed in recent years as well. Inflation for medical care since the turn of the century has been much higher than overall inflation.

Health care and its costs remain among the biggest hot-button issues in US politics. Most of the democratic candidates for president have released proposals for healthcare reform, ranging from tweaks to Obamacare like adding a public insurance option, as suggested by former Vice President Joe Biden, to a full-blown overhaul of the health care system, going to a single-payer "Medicare for All" plan, as championed by Sen. Bernie Sanders and Sen. Elizabeth Warren.

Another factor contributing to why the economy doesn't feel as good as it could is rising income inequality.

In 2016, the US scored much higher on a standard measure of inequality than most other wealthy, developed economies.

The Gini coefficient shows how far away from equal a country's income distribution is. A coefficient of 0 indicates a completely equal distribution, where everyone has exactly the same income, while a coefficient of 1 indicates a completely unequal distribution, where one person receives all of the income in a country and everyone else gets nothing.

Higher inequality in the US suggests that many Americans are being left out of the current boom, while those at the top keep seeing their wealth increase.

Inequality has also gotten worse in the US in the last several decades.

After World War II, the share of national income going to the top 1% steadily declined. It has climbed dramatically since the 1980s, returning to Gilded Age levels.

7 billionaires who have Warren Buffett to thank for their fortunes

Sun, 09/01/2019 - 9:27am  |  Clusterstock

Warren Buffett isn't the only person to benefit from Berkshire Hathaway's success.

At least seven other individuals and families have become billionaires thanks to their stakes in the Omaha-based conglomerate, Bloomberg reported in May 2019. And not all of the Berkshire Hathaway billionaires were early investors: One was an early employee, while several others sold their businesses to Berkshire Hathaway for stock instead of cash.

Read more: Warren Buffett just announced he's donating $3.6 billion in Berkshire Hathaway shares to 5 foundations. Here's how the notoriously frugal billionaire spends his $87.3 billion fortune

No Berkshire investor is wealthier than Bill Gates. Gates personally owns some shares of Berkshire Hathaway, in addition to the shares owned by the Bill & Melinda Gates Foundation, according to CNN. Of course, the majority of Gates' $103.5 billion fortune comes from his stake in Microsoft, Forbes reports. Gates is wealthier than Buffett himself, who currently has an estimated net worth of $79.7 billion, according to Forbes.

Keep reading to learn more about the Berkshire Hathaway billionaires.

SEE ALSO: A billionaire venture capitalist who made early investments in Twitter and Skype says there's a single question he asks himself when deciding which companies to invest in

DON'T MISS: Meet Laura Arnold, the billionaire philanthropist taking on the parole system with Jay-Z and Meek Mil

Stewart Horejsi first invested in Berkshire Hathaway after reading about Buffett's investment strategy.

Horejsi bought shares of Berkshire Hathaway for $265 apiece in 1980, according to Forbes. Then a small business owner, Horejsi had just read John Train's 1980 book "The Money Masters," which heralds Buffett as one of the greatest investors alive. A graduate of the University of Kansas, Horejsi once ran a wedding supply business owned by his family. He now spends his time managing their fortune.

He currently has a net worth of $1.5 billion, according to Bloomberg.

Source: Bloomberg, Wyatt Investment Research

Charlie Munger is Berkshire Hathaway's long-time vice-chairman.

Munger is also Buffett's "right-hand man," according to Forbes. Also an Omaha native, he first met Buffett at a dinner party in 1959, but was a successful investor in his own right before joining Berkshire Hathaway, according to Investopedia — he ran an investment firm from 1962 to 1975 that generated annual returns of 19.8%.

Forbes puts his current net worth at about $1.6 billion.

Read more: Charlie Munger is Warren Buffett's right-hand man — here are 18 of his most brilliant quotes

David Gottesman's investment firm First Manhattan Co. made an early investment in Berkshire Hathaway.

Gottesman, who goes by "Sandy," founded First Manhattan in 1964 and remains actively involved to this day, according to the company's website. The firm manages over $16 billion for clients.

Gottesman, an early investor, also sits on Berkshire Hathaway's board.

The 93-year-old currently has a net worth of $2.1 billion, according to Bloomberg.

Albert Ueltschi sold his aviation training company to Berkshire Hathaway in exchange for shares in the investment firm.

Ueltschi, a pilot, was the founder of FlightSafety International, a company that used flight simulations to train pilots, according to Forbes. He received $1.5 billion in stock when Berkshire Hathaway acquired FlightSafety International in 1996.

After Ueltschi died in 2012, his family inherited his $2.5 billion fortune, according to Bloomberg.

Source: The National Aviation Hall of Fame

Larry Van Tuyl sold a controlling interest in his family's car dealerships to Berkshire Hathaway for $4.1 billion in stock in March 2015.

Van Tuyl's father opened the family's car dealership in 1952, and the father-son pair built it into the third-largest car dealership network in the country by 1997, according to Forbes.

The 69-year-old serves as the chairman of Berkshire Hathaway Automotive and has a net worth at least $1.5 billion, according to Wealth-X. The extended Van Tuyl family has a net worth of $2.5 billion, per Bloomberg.

Walter Scott owns 8% of Berkshire Hathaway's utilities division.

Scott is a close childhood friend of Buffett's, according to Forbes. The pair worked together to purchase utility company MidAmerican Energy in 2000. The company was renamed Berkshire Hathaway Energy and became a subsidiary of the larger Berkshire Hathaway conglomerate. Scott now sits on the board of Berkshire Hathaway.

Scott, 88, has a net worth of $5.13 billion, per Bloomberg's most recent estimate.

The family of former Tennessee Gov. Bill Haslam sold their chain of truck stops to Berkshire Hathaway in 2017.

The Haslam family still oversees the day-to-day operations of their Knoxville-based company, Pilot Flying J, according to the Nashville Business Journal. Former Gov. Haslam's brother, Jimmy Haslam, serves as the CEO.

The Haslam family now has a collective net worth of $5.9 billion, according to Bloomberg.

Peloton's pitch, a deadline at D.E. Shaw, and SoftBank's Deutsche Bank connection

Sun, 09/01/2019 - 8:51am  |  Clusterstock

Hello and happy Labor Day weekend!

First it was WeWork. Now it's Peloton that's aiming to go public. As my colleague Alexei Oreskovic wrote this week in his weekly Trending email (sign up here if you don't already receive it), there's more than just the red ink on their income statements that ties the two companies together. 

Both of these New York companies have garnered rich valuations in the private markets despite spiraling losses, they both have dual stock structures giving insiders 20 votes per share (one-upping the already controversial 10-votes-per-share norm of their Silicon Valley counterparts) and both stretch the definition of what it means to be a "tech" company.

Troy Wolverton previously spoke to Peloton investors to find out why they think the business is set to explode. And as Shona Ghosh reported, while Peloton played up its subscription business in its IPO filing, its hardware margins are actually more impressive than Apple's. Peloton's hardware margins were 44% in 2018, while Apple's were about 30%.

Troy had some analysis on Peloton's ultra-low churn rate. Peloton says only 0.65% of its subscribers cancel each month. Customer retention experts told Troy that number "doesn't pass the smell test." He also noticed that the company disclosed in its IPO paperwork that it had discovered problems with its internal controls.

The S-1 also lifted the lid on the extent of Peloton's marketing spend, which increased by 114% ahead of its IPO in its quest to win over a young, affluent audience. Tanya Dua has the details there

Julie Bort meanwhile had a breakdown on the compensation packages of the top two execs, including CEO John Foley, with each getting $21.4 million.

One thing I found interesting in the IPO filing: There wasn't a lot of information on the performance of Tread, the company's $4,000-a-pop treadmill. I'll admit to being a regular Peloton user and spin bike owner. New York's a tough place to cycle around and the winters can be rough. I'm less clear though on the growth prospects for Tread.

What am I missing? What do you think to Peloton's prospects? Let me know.

-- Matt

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In addition, we now have a suite of weekly newsletters written by our top editors and reporters in areas ranging from tech to investing, advertising to cannabis. Check out the list and sign up to receive them.


Patty McCord was the original chief talent officer at Netflix. Now she's an HR consultant and the author of the book "Powerful." During a Business Insider Prime webinar, she shared some of the most common people-management mistakes she sees — and how to avoid them. You can get the key takeaways from her presentation and access to a recording of it right here.

Finance and Investing

D.E. Shaw asked staff to sign a take-it-or-leave noncompete, and the deadline is weeks away. Insiders say some people could walk even after management improved the payout.

D.E. Shaw has relaxed terms of its deferred-compensation structure ahead of a mid-September deadline on the firm's new noncompete contract for all investment staff to either sign the agreement or get fired, insiders said.

UBS's Americas private-wealth head says he thinks losing a 'few hundred' advisers would not be a bad thing, and is looking at how robos can help keep the bank's richest clients

UBS rolled out a digital-wealth platform in April 2018 by teaming up with the fintech startup SigFig and, at the time, promoted it largely as a nice-to-have enhancement for smaller US clients.

Ray Dalio sees 'serious problems' stemming from the next recession. Here's why he warns even the Fed might be powerless to save the economy.

Few things can conjure up a panic among investors quite like a recession.

Tech, Media, Telecoms

$100 billion SoftBank Vision Fund has shaken up Silicon Valley with mega fundings. A cadre of Deutsche Bank alums are behind many of the deals.

The SoftBank Vision Fund is most closely associated with SoftBank Group's CEO, Masayoshi Son.

'It gives a sense of elitism': Netflix is pioneering brand deals for streaming TV, but some partners bemoan its approach

If you're a brand looking to land a high-profile tie-in to a Netflix original like "Stranger Things," Netflix will call you — you won't call them.

Beleaguered media measurement giant Comscore is turning over a new leaf, again — and says it will be cashflow positive by the end of the year

Beleaguered media measurement and and analytics giant Comscore is recalibrating itself again.

Healthcare, Retail, Transportation

A startup working with 200 pharmacies is trying to break into the hypercompetitive drug-delivery business and give elderly Americans cheaper medications

In 2014, Stu Libby wanted to do something about the long wait times at pharmacies. He thought there must be an easier way to pick up prescription drugs.

Beauty mogul Huda Kattan, who built a $610 million fortune from online fame, shares 3 business tips for influencers starting their careers

Huda Kattan, the 35-year-old self-made beauty mogul worth over $600 million, is one of the most successful influencers of all time and has a whopping 38 million Instagram followers.

Join the conversation about this story »

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Before it was a smash hit, clothing resale app Poshmark struggled to convince investors that mobile was the future. Here’s the original, 2011 pitch deck that inspired one VC to bet on it.

Sun, 09/01/2019 - 8:00am  |  Clusterstock

Poshmark, the popular clothing resale app, has come a long way since its founding nearly ten years ago at the dawn of the smartphone age. 

The buzzy startup, which has raised more than $159 million in venture capital, is rumored to be a IPO candidate, at a time when other high profile startups like WeWork and Peloton are preparing to list shares on the public markets. Similar to those companies, Poshmark isn't profitable, but has looked at expanding into home decor, men's clothing, and children's clothing resale to up the ante ahead of a public debut.

The 8-year-old company was originally founded as GoshPosh by CEO Manish Chandra, Tracy Sun, Gautam Golwala, and Chetan Pungaliya.

"The original idea of GoshPosh was "Gosh, it's posh," like it was surprisingly stylish," Chandra told Business Insider. "But 'gosh' has a really interesting connotation so we started looking for something else, but I was insistent to having posh in the name. The name search was a crazy process, but Poshmark appealed to us because it worked on a few levels."

Read More: This CEO didn't want to go with traditional venture capital, so he challenged his employees to use this pitch deck to find individual investors. They raised $13 million from 70 people.

An IPO would be Chandra's first time taking a company public even though the company is his second. He sold his first company Kaboodle, an earlier version of Pinterest, to Hearst in 2007 for an undisclosed amount. 

"That was the first time in understanding social shopping," Chandra said. "When I left Kaboodle and Hearst in 2010, I knew I wanted to pursue this, but the technology didn't exist. The idea was reborn with the advent of the iPhone 4 because it had great picture taking capabilities and editing capability."

Chandra said he and his founding team struggled to convince investors that Poshmark could be a successful app that only lived on a user's mobile device. According to Chandra, multiple investors asked the team to develop a version that worked on a web browser or completely abandon mobile for more familiar territory. But the entrepreneur's track record was enough to convince Navin Chadda, managing partner at Mayfield fund.

"He pitched me his last company Kaboodle but I didn't think that was a venture opportunity so I didn't invest," Chadda told Business Insider. "We kept in touch, and in 2010 he was thinking about what to do next and was very intrigued with what the iPhone had done. He had shut off from using PCs entirely and was only on mobile, so we brainstormed what you could do to marry social networks around photos with commerce."

Chadda ended up leading Poshmark's $3.5 million Series A in February 2011 that valued the company at $6.5 million. His conviction in Chandra and his team paid off: the company was recently valued at $625 million and will raise even more if the public offering goes as planned.

"He is the soul and driving force," Chadda said of Chandra. "He is the person to keep leading this company and build it into an industry giant."

See Chandra's original pitch deck for GoshPosh that convinced Mayfield to back the company when other investors turned away.

SEE ALSO: Raising a Series A round used to be a victory lap for startups. Thanks to Softbank, it’s become one of the most competitive rounds with the highest stakes.

Investors have triggered a recession signal with a perfect 50-year track record — and one expert says years of 0% market returns could be in store

Sun, 09/01/2019 - 6:02am  |  Clusterstock

  • Barry Bannister, Stifel's head of institutional equity strategy, says a market indicator with a flawless track record for 50 years is telling him that the US is months away from a stock plunge and recession.
  • For Bannister, that settles a debate over the recent yield curve inversion and whether it's really telling investors that a recession is on the way.
  • He says that stock valuations are very high, and it's possible the S&P 500 index will return roughly 0% over the next five years. 
  • Click here for more BI Prime stories.

Since the US yield curve inverted and startled the market, there's been a debate about whether the recession  warning sign was for real.

Stifel's head of institutional equity Barry Bannister says that it is, and the implications are more dire than most people believe. In a note to clients, he writes that stocks are likely to sink in December, with a recession setting in in May. After that he sees a "dangerous" market where the S&P 500 could deliver 0% returns for five years.

A yield curve inversion occurs when short-term bond yields top their longer-dated counterparts, and is a sign investors are deeply worried about the economy. Since it's happened before each of last seven recessions, it's considered one of the most trustworthy recession signals. And it's flashed recently as the trade war prompted an investor flight to safer assets. 

But Bannister notes that it's also sounded some false alarms over the years. So he uses a different yield curve measurement that he says is more precise: a 50-day moving average of the spread between the 3-month and 10-year bonds. He says that version of the yield curve has correctly forecast every recession in the last 50 years without a single incorrect prediction.

"A 50-day moving average of the 10 year-3 month has given no false recession signals in the past 50 years," he says.

Bannister, who has long had a dim view of the market, shows the measure's history at the top of this chart. The second chart below shows that these yield curve inversions have been followed pretty quickly by declines in S&P 500 profits.

Bannister says his yield curve measurement inverted on June 20. His projections about the timing of a market sell-off and recession are based on historic averages of what happened before previous downturns.

"If a recession arrives in May 2020, stocks may plunge in December 2019 with the standard lead-time to the onset of recession," Bannister writes. Also average, he says, would be a 26% decline in S&P 500 profits and a 32% plunge in index itself.

Hard times

That sounds bad enough, but Bannister adds that the combination of low interest rates and stock buybacks have pushed stock valuations to very high levels, leaving little room for gains in the years ahead.

"The S&P 500 is at the very top of the range predicted by our forward 10-year price range model," he writes. "The S&P 500 is over-valued/over-owned with a near 0% compound annual total return the five years 2Q 2019 to 2Q 2024E."

Read more: Trade fears are making stocks wildly unpredictable. The chief of Wells Fargo's $1.9 trillion investing business told us how you should play defense in the market.

Based on that dire forecast, he's advising investors to buy defensive stocks instead of those with more exposure to the economic cycle, as defensive companies tend to do better into the middle of a recession. And he's also urging a lot of caution.

"The implication of a near 0% 5-year S&P 500 forecast is clearly a non-linear, dangerous market, especially for high beta," he says.

SEE ALSO: A millennial handling $325 million for the wealthy maps out 2 scenarios for how aggressive to be if you're young and starting to save for the future

Join the conversation about this story »

NOW WATCH: Nxivm leader Keith Raniere has been convicted. Here's what happened inside his sex-slave ring that recruited actresses and two billionaire heiresses.

How can African brands conquer the world market? by @dremmnuesiri

Sat, 08/31/2019 - 3:35pm  |  Timbuktu Chronicles
Emmanuel Nuesiri writes:

Its October 2001 and I am on a bus in London observing the roadside shops when I saw Obalende Suya and smiled. Obalende is a place in Lagos, Nigeria, known for its amazing mouth watering Suya - a spicy kebab style grilled meat popular in West Africa. Having grown up partly in Lagos, it was good seeing a business venture from 'home'.

Recently, I was curious to find out what has happened to Obalende Suya in London? I googled and saw that it has remained a single location business. I wonder why a beloved African food brand with a lot of history and greatness behind it, has not been franchised to all the major cities in the world? What is it that is holding back world class African products like Obalende Suya from conquering the world market?...[more]

Wealthy weekender's guide: Where to eat, shop, stay, and party in the Hamptons

Sat, 08/31/2019 - 1:55pm  |  Clusterstock

The Hamptons, a series of beach towns and villages dotting eastern Long Island, New York, are known around the world as a destination for ultra-wealthy vacationers. And, while all indisputably beautiful, each area of the Hamptons offers something a bit different. 

Whether you're looking for a great night out or a shopping center loaded with the top brands, there's a place for everything — you just have to know where to look. 

Read more: Inside the most expensive property for sale in the Hamptons, which is listed for $150 million and costs 75 times more than the swanky area's median home

Business Insider spoke with Diane Saatchi, a Hamptons-based real-estate agent at Saunders & Associates, to get the inside scoop on how to enjoy the Hamptons, neighborhood by neighborhood. 

From the places with the most celebrities to the area with the best restaurants, Saatchi's tell-all interview with Business Insider will help guide you on the perfect trip through one of America's swankiest destinations.

Keep reading for a look at the guide.

SEE ALSO: A couple paid $1.6 million to move their Nantucket mansion away from an eroding bluff, and it's an increasingly common problem coastal dwellers will have to face

DON'T MISS: The most expensive rental in the Hamptons is hosting a fundraiser for President Trump. Take a look at the mansion and its outrageous amenities, which can be rented for $1 million a month.

The Hamptons: An intro

The Hamptons are located on the South Fork of Long Island and are about two hours away from Midtown, Manhattan by car — if there's no traffic, which there usually is. The area is made up of two proper towns: Southampton and East Hampton. 

The map above features Business Insider's top picks of the hottest summer spots in the Hamptons: Westhampton Beach, Quogue, Southampton, Sagaponack, Sag Harbor, East Hampton, Amagansett, and Montauk.



The Hamptons welcome millions of visitors each year and are known around the world for attracting ultra-wealthy vacationers.

Source: Newsday

For a good meal, head over to the Hamptons' Sag Harbor.

Whether you're looking to dine while dressed to the nines or kick back after a day at the beach, according to Saatchi, Sag Harbor has it all. 

"There are more restaurants choices in this small town/village than in all the others," Saatchi told Business Insider. "Options range from very posh to seriously casual."

Sag Harbor is a bayfront village that's around just four miles from the ocean. It's located in between both East Hampton and Southampton.

Two of Saatchi's top picks for dining out are Estia's Little Kitchen, a Latin American restaurant, and Le Bilboquet, a French restaurant. Estia's is open for breakfast, lunch, and dinner.

Source: Estia's Little Kitchen

Enjoy your drink of choice in Montauk.

Montauk is a village located on the eastern edge of Long Island. It's about 120 miles away from New York City by car and includes over 5,000 acres of parks and beaches.

And, if you're looking to spend your time in an area with exciting nightlife, Montauk is the place to be, according to Saatchi. 


Along with being a good place to party in general, Montauk is also home to the "hottest clubs for singles," Saatchi told Business Insider. The Crow's Nest is a popular place to grab a sunset drink or a sitdown meal.

You've got a good chance of bumping into your celebrity crush in East Hampton Village.

The Hamptons are often visited by celebrities including Brooke Shields, Anderson Cooper, and Neil Patrick Harris.

The best chance you have of running into a Hollywood A-lister is in East Hampton Village, according to Saatchi. 

In fact, Saatchi told Business Insider that the best places to test your luck include Babette's, a local restaurant, during brunch or lunchtime, or Nick and Toni's, another local restaurant, during dinner time.

East Hampton Village is located on the southern shore of Long Island.

If you want to buy a house but aren't looking to shell out millions, look no further than Springs in East Hampton.

Springs is a hamlet in East Hampton. 

According to Saatchi, it is "home to many artists, has beautiful beaches, waterfront restaurants, country markets, recreational facilities, and an excellent K-8 school."

Saatchi told Business Insider that many of the homes in this hamlet sell for under $1 million.


This 4-bedroom, 4-bathroom home on Spruce Street spans 2,100 square feet and is on the market for $1.095 million. The home boasts a wraparound cedar deck and a heated pool.

Source: Saunders & Associates

Now, if you just want to look at some gorgeous real estate, head south of Route 27A in Southampton.

For all luxury home enthusiasts, south of Route 27A in Southampton is the best place to see the biggest and most beautiful homes in the Hamptons, according to Saatchi. 

The area is surrounded by generations of wealth.

"Many of the original 'cottages' remain in the same families. The area has an old-world feel that was not changed by the newer summer residents," Saatchi told Business Insider.



This 6-bedroom, 6-bathroom home on Aqua Drive in Southampton is currently listed for $6.995 million and features over 6,000 square feet of interior space.

Source: Saunders & Associates

If you're eager to visit the Hamptons but want to minimize the dent the trip puts in your wallet, Montauk is your safest bet.

Located at the very tip of Long Island, Montauk takes the cake as the most popular spot for millennials in the Hamptons.


"Montauk has four draws for millennials: great surfing, lots of reasonably priced dining and lodging options, and the best nightlife," Saatchi told Business Insider.

Want to avoid the crowds? Head to Wainscott in East Hampton.

While Wainscott is not well known, it is home to a beautiful beach with only seven oceanfront homes, Saatchi told Business Insider.

It is also home to Georgica Association, a private enclave. According to Mansion Global, Georgica Association is made up of three streets and around just 35 homes. Those who stay there are of ultra-wealthy status.

Source: Mansion Global

Read more: The 12 most innovative and beautifully designed buildings in 2019, according to architects

For the top brands, there's no better place to go than Southampton Village.

If you're looking for the best place to shop in the Hamptons, Saatchi suggests you make your way to Southampton Village.

"Southampton Village has the largest "central business district" [in the Hamptons], and as such, the most shops," Saatchi told Business Insider.

While there are many unique one-off clothing shops, Saatchi explained, Southampton Village also boasts national brands like Ralph Lauren, Theory, and J. Crew.

An inside look on how home improvement giants Lowe's and Home Depot are battening down the hatches for Hurricane Dorian (LOW, HD)

Sat, 08/31/2019 - 12:36pm  |  Clusterstock

Hurricane Dorian is hurtling toward the southeastern United States, but the residents caught in the path of the hurricane aren't the only ones bracing for the storm. Home improvement giants Home Depot and Lowe's have also prepped for the hurricane, with the help of their emergency command centers.

The two largest home improvement retailers in the world have set up command centers to coordinate relief during disasters and ensure that their stores are stocked with the right products to help communities both batten down the hatches and bounce back.

The home improvement business has a complicated tie to natural disasters. On the one hand, inclement weather and dangerous circumstances can put a stop to construction or renovation projects. On the other, people looking to repair their properties in the wake of a disaster will flock to their local home improvement retailers.

"The rebuilding effort will obviously require a fair amount of goods that Home Depot and Lowe's sell," Seth Basham, the managing director of equity research at Wedbush Securities, previously told Business Insider

But different types of disasters require different responses, which is where the home improvement retailers' emergency command centers come in. Business Insider spoke with both Lowe's and Home Depot about their respective centers.

During disasters, Lowe's command center swells

A Lowe's spokesperson told Business Insider that the company has around 140 stores in the path of the storm, and that its distribution facilities in Florida, Georgia, and North Carolina are expediting emergency supplies to those locations.

During a disaster, the staff at Lowe's' emergency command center swells to about 100 employees, who are tasked with ensuring that all stores are staffed and stocked with critical supplies before, during, and after disasters. This year, Lowe's' headquarters prepared for the hurricane season by filling 20,000 buckets with cleanup supplies like gloves, bleach, and trash bags, to be distributed "based on community needs," according to a spokesperson.  

"After hurricanes, specially trained Lowe's associates voluntarily leave their stores and homes to serve on associate relief teams," the spokesperson told Business Insider in a statement. "They provide additional customer support and give fellow associates a chance to focus on their families."

At the moment, around 300 Lowe's associates are ready to deploy to stores affected by Hurricane Dorian.

Read more: A look inside the emergency command center where Lowe's employees monitor natural disasters like hurricanes and deploy supplies to devastated parts of the country

"This week, Lowe's has shipped more than 1,400 truckloads of supplies to the region," a Lowe's spokesperson told Business Insider in a statement. "Lowe's continues to roll in additional supplies by the hour and is moving trucks 24 hours a day, with store night crews receiving truckloads around the clock. We're continuing to ship product to Florida and sending additional truckloads to coastal markets in Georgia and the Carolinas."

Home Depot works with Aid organizations to coordinate its response to disasters

Home Depot currently has 150 stores in the storm's trajectory. Its command center is staffed by 200 employees who work in the company's supply chains, operations, merchandising, and human resources departments. 

"We also have space for our transportation vendors so we can closely partner and make quick decisions," a Home Depot spokesperson told Business Insider in a statement. 

The center ensures that necessary supplies are shipped to affected areas after — and, if possible, before — natural disasters.

"Our focus with an approaching hurricane is to get the right products into our stores and quickly as we can," a Home Depot spokesperson told Business Insider. "We prioritize the most in-demand items like generators, gas cans, batteries, water and plywood."

Home Depot has teamed up with operations like American Red Cross, Team Rubicon, Convoy of Hope, Operation Blessing, and All Hands and Hearts to coordinate its efforts. The Home Depot Foundation also previously prepped for hurricane season by prestocking "the warehouses of various nonprofit partners with emergency supplies to ensure they are prepared to activate to impacted communities quickly," according to a statement.

"Whenever a storm is approaching, our hope is that any damage and impact to communities is minimal, but we're prepared and ready to respond before and after a storm strikes to support our communities and our associates," Hector Padilla, president of Home Depot's southern division, said in a statement.

Watch Home Depot and Lowe's employees prep for Dorian:

Got tips? Email

SEE ALSO: A Home Depot exec explains why chasing trends is overrated in the home decor space

READ MORE: Home Depot execs reveal why the retailer is sharpening its focus on women shoppers

SEE ALSO: A look back at Lowe’s journey from small family hardware store to retail giant

Join the conversation about this story »

6 ways you're probably leaving money on the table on a daily basis

Sat, 08/31/2019 - 11:45am  |  Clusterstock

Leaving money on the table won't serve you well in the pursuit of building wealth. It pays to be thoughtful about your systems for spending, saving, earning, and investing money.

You can make the most of your money every day by saving in an account that earns interest, using credit cards that reward you for purchases, and contributing enough to your 401(k) to get free money from your employer, to name a few.

Keep reading for ways you might be leaving money on the table, and what to do to improve:

1. Ignoring your 401(k) match

If your employer offers to match contributions to your 401(k), take them up on it. It's free money and the limit will typically be equal to a percentage of your salary, so there's a clear goal to aim for.

What to do: Check your 401(k) plan documents or reach out to the human resources team at your company to find out exactly how your employer match is calculated. Minimally, financial experts recommend contributing enough money to your 401(k) plan to qualify for your employer match before turning your attention to other tax-advantaged retirement accounts.

Just like your own contributions, you won't pay taxes on any employer contributions until you withdraw the money from the account at age 59-and-a-half or later.

2. Sitting on too much savings

If you have a goal to build wealth, it's possible to have too much savings.

It's important to keep enough cash in an easily accessible account to cover monthly expenses, tap for emergencies, and fund big purchases, but anything beyond that will have the greatest potential for growth when it's invested in the stock market. No savings account or sock drawer will help your money grow by an average of 8% a year.

What to do: Financial expert Ramit Sethi says the best and most reliable place to start investing is through your retirement accounts. If you consistently have extra cash leftover at the end of the month after paying your bills and funding your savings goals, consider increasing your retirement contributions. 

"They're not sexy, they're not going to be in the news, but you don't want them there. You want your investments to be really simple," Sethi previously told Business Insider. "A target date fund is great, or a basket of index funds. That's how I would approach it."


3. Skipping the high-yield savings account

If your savings is still sitting in a regular savings or checking account earning less than 1% in interest, you're missing an opportunity to earn money while you sleep.

High-yield savings accounts are a great place to store money for emergencies and short-term goals, including money you're shoring up to invest. There's zero risk of loss, the money is easily accessible, and your balance grows with no effort.

What to do: Transfer your emergency fund and any goal-specific money into a high-yield savings account, or multiple. Choose an account earning at least 2% in interest and you'll have a shot at beating inflation to grow that money into even more.

Say you have $5,000 in a regular savings account earning the average 0.09% annual percentage yield (APY). With no additional contributions, you'll earn about $4 in interest in 12 months. If you put that $5,000 into a Wealthfront cash account, which currently earns an industry-leading APY of 2.32%, you'll boost your account by $117 in interest over the same time period.

4. Not using a rewards credit card

A good rewards credit card is a must-have in 2019. You can earn points, perks, and cash that can be worth up to hundreds of dollars per year.

What to do: Choose a rewards credit card that maximizes the purchases you're already making. If you spend a lot on groceries, consider the Blue Cash Preferred Card from American Express, a cash-back card that offers 6% back at US supermarkets up to $6,000 in combined annual purchases and 1% thereafter.

If you regularly book travel and dine out, consider the Chase Sapphire Preferred — there's an annual fee of $95, but the sign-up bonus alone is worth around $750 toward travel.

5. Overlooking employee benefits

Employee benefits are valuable, but too often overlooked. Most companies offer some benefits beyond health insurance and retirement plans, such as discounted gym memberships, reimbursement for your cell phone bill, or a stipend for public transportation. 

What to do: Take 10 minutes to reach out to the human resources team at your company and fill out any necessary paperwork or online applications to claim your benefits. You may be surprised by what your employer is willing to pay for.

6. Not reviewing your tax withholding

April shouldn't be the only month you think about taxes. If you're a W-2 employee and change jobs, land a raise, get married, have a baby, or otherwise complicate your tax situation, it could be time to review and adjust your tax withholding. 

The number of withholding allowances you claim indicates how much of each paycheck will be withheld by your employer to pay the IRS. If too much is withheld, you'll get a big refund. If too little is withheld, you'll get a tax bill.

You'll get the most mileage out of your dollar if you aim to break even — you want to avoid giving an interest-free loan to the government. Your paycheck will be bigger throughout the year, giving you more room to save and invest.

What to do: Gather your recent pay stubs and last year's tax return to use the IRS' tax withholding estimator. If the suggested number of withholding allowances is different than what's on your paystub, ask your human resources team for a request to change it. 

Generally, the government recommends that a single person with no dependents and one job claim two allowances to get as close as possible to covering their tax liability.

You can now book an Uber ride without a phone for the first time (UBER)

Sat, 08/31/2019 - 10:32am  |  Clusterstock

  • Uber rides are now bookable without a smartphone at Toronto's Pearson International Airport. 
  • The company launched the kiosks earlier this month, with inspiration from similar ones at its driver hubs. 
  • There's no word yet on future locations.
  • Visit Business Insider's homepage for more stories.

For the first 10 years, Uber was more or less useless to those without a phone. But that's finally starting to change.

Earlier this month, the ride-hailing giant rolled out a kiosk at Toronto's Pearson International Airport that allows passengers to to book a ride without a smartphone. The company says it's designed to create greater access for travelers who might have a difficult time using the app because of language or tech issues.

Much of the technology in the kiosk is similar to what's used in "green light" hubs, where the company on-boards drivers, one of the designers of the Toronto kiosk said on Twitter. Those same kiosks have also been used in malls in the San Francisco area. 

Hardware breakdown: Top Monitor is a 32 inch LCD display; Bottom Tablet is a 2019 10.5 inch iPad Air; Swipe and chip credit card reader to the right of the tablet. Top monitor is powered by a small contained Dell PC which has an Electron app running. Tablet app is a native app;

— Jon Kantrowitz (@jkantro) August 21, 2019

"One influence for the Uber kiosk came from arcade games, which, compared to a PC at home, creates a social environment inviting others to help the primary user," Anurag Agarwalla, head of Uber's innovation team for its technology services group, said in a blog post. "That attribute, along with a live support representative, brings in a human element we wanted to highlight."

There's no word yet on what locations might be next, but the company says it hopes to use them to increase access at high-volume venues.

More Uber news: 

SEE ALSO: Uber has proposed a new minimum wage for drivers after years of protests, but it comes with a catch

Join the conversation about this story »

NOW WATCH: Here's why phone companies like Verizon and AT&T charge more for extra data

Here’s the real reason that Juul’s CEO is warning people against using his e-cigs

Sat, 08/31/2019 - 10:30am  |  Clusterstock

  • In an interview with CBS, Juul CEO Kevin Burns warned against using his products and acknowledged that vaping has unknown health risks.
  • Juul has walked a fine line between portraying its products as a trendy gadget and a healthcare tool.
  • After launching as a sleek Silicon Valley gadget with parties and free giveaways, Juul rose to prominence as America's most popular e-cigarette.
  • Now, Juul is being forced to shift its marketing as the sleek devices face scrutiny over their role in sparking a teen vaping epidemic.
  • Nicotine, Juul's main ingredient, is a highly addictive drug.
  • Visit Business Insider's homepage for more stories.

In an interview with CBS on Thursday, the CEO of the $38 billion e-cigarette company Juul warned against using his products. 

Specifically, Juul CEO Kevin Burns said anyone who isn't already using nicotine, the addictive drug in Juul, should not start.

"Don't vape. Don't use Juul," Juul CEO Kevin Burns told Tony Dokoupil in an interview that aired on "CBS This Morning."

"Don't start using nicotine if you don't have a preexisting relationship with nicotine," he said. "Don't use the product."

Burns' remarks are the clearest sign yet of how Juul is being forced to shift its marketing as the sleek devices face increasing scrutiny over their role in sparking a teen vaping epidemic and potentially being tied to seizures.

Products like Juul cannot be explicitly marketed as tools for quitting smoking, according to federal law. But that doesn't mean companies who make them can't suggestively advertise them as such.

And on Thursday, shortly after warning people not to Juul, CEO Burns said the company was helping American smokers quit.

Juul declined to comment for this story beyond Burns' recent remarks. The company pointed to a recent opinion piece in which Burns says that the "1 billion adult smokers worldwide who should have the opportunity to switch to vapor products if they so desire."

Juul is part-owned by tobacco giant Altria

Juul has walked a fine line between portraying its products as a trendy gadget and a healthcare tool.

The company launched its devices in 2015 with a series of promotional events that included parties, free giveaways of its devices, and posters that featured young-looking models. At the time, the e-cigarettes were sold in flavors that included dessert with labels that included the word "cool." 

Juul has now risen to prominence as the most popular e-cigarette in America. It is also now partially owned by Altria, the tobacco giant behind Marlboro.

In recent months, Juul has been edging into the healthcare space: first by pitching its e-cigarette as an anti-smoking tool to employers and insurers, then by outlining plans for a mobile app geared at turning smokers into Juulers.

Read more: E-cig company Juul is diving further into health with an app geared toward turning smokers into Juulers

But while Juul aims to show customers that it can improve their health, regulators are increasingly pointing to the potential health risks of its products.

Two federal agencies are now investigating whether Juul engaged in deceptive marketing. The FDA is also looking into reports of seizures linked with the Juul, Bloomberg reported. And US health agencies are investigating a spate of lung illnesses tied to vaping.

Read more: Here are all the health risks of vaping

Addictive gadget or anti-smoking tool?

Federal regulations prohibit companies like Juul from stating outright that their devices can help people quit smoking, in part because it's still unclear whether or not they can.

Meanwhile, vaping appears to have helped hook young people on nicotine. Experts have suggested that Juul has played an outsize role in this phenomenon. Teens who vape are also more likely to go on to smoke, according to two large studies.

"The dramatic spike of youth [vaping] — that was driven in part at the very least if not largely by Juul," former FDA commissioner Scott Gottlieb told Vox.

Burns previously apologized to parents of kids addicted to Juul's products.

In March, Juul put out a study suggesting that some adult smokers may be using Juuls to wean themselves off regular cigarettes. The study, published four years after Juul's products had been on the market, was paid for by Juul.

During Thursday's interview, Burns, Juul's CEO, said Juul was "absolutely contributing to the decline of the smoking rate." Smoking rates in the US have been steadily declining since the 1960s, reaching the lowest level ever recorded in 2017, according to the CDC.

SEE ALSO: E-cig company Juul is creating app geared toward turning smokers into Juulers

DON'T MISS: Officials are investigating a spate of lung illnesses tied to vaping. Here are the other health risks you should know about.

Join the conversation about this story »

NOW WATCH: Most hurricanes that hit the US and Caribbean islands come from the same exact spot in the world

Peloton says only 0.65% of its subscribers cancel each month. Here's why customer retention experts think that number 'doesn't pass the smell test.'

Sat, 08/31/2019 - 10:00am  |  Clusterstock

  • Peloton, in the paperwork is filed for its initial public offering, touted data that indicates that very few of the subscribers to its fitness video service cancel each month.
  • The company's churn rate — the portion of customers that cancel in a given period — appears to be far lower than that of Planet Fitness or even Netflix.
  • But its churn numbers shouldn't be taken at face value, customer retention experts said.
  • They're likely understated due to a number of factors, including the huge number of subscribers it's been adding and long-term subscription deals it used to offer to its customers.
  • Click here for more BI Prime stories.

Peloton wants potential investors to know its customers love its fitness service so much, that few of them ever give it up. 

But experts in customer retention think there's more to the story than the company is saying.

The debate centers on something called churn, which is a term for the portion of a company's subscriber base that cancels service during a given period. Although Peloton is known for its fitness equipment, it also offers a subscription service that streams live and recorded workout videos to screens on those devices. The subscription service allows it to stay connected with its customers — and provides it with an ongoing revenue stream — after they purchase its equipment.

According to data in the paperwork Peloton's filed this week for its planned initial public offering, it has remarkably low churn, which could bode well for the long-term prospects of its business.

"Our compelling financial profile is characterized by high growth, strong retention, recurring revenue, margin expansion, and efficient customer acquisition," the company said in its IPO paperwork. "Our low Average Net Monthly Connected Fitness Churn, together with our high Subscription Contribution Margin, generates attractive Connected Fitness Subscriber Lifetime Value."

Read this: Peloton, the fitness startup with a cultlike following, could go public at an $8 billion valuation. Insiders reveal why its business seems set to explode.

But customer retention experts think Peloton's churn rate is understated in multiple ways and in the future will likely be significantly higher than it is now. Churn rates are commonly reported in the fitness industry, but they're not a particularly meaningful measure of customer value, said Paul Bedford, a principal at Retention Guru, a consulting firm that helps health clubs improve customer retention.

"I wouldn't invest any money based on that [churn] number," Bedford said. He continued: "When I see that number, I just disregard it ... It's a vanity metric."

Peloton's churn rate is far lower than Netflix's

Peloton offers two different subscription services: one that's targeted at people who own one of its fitness bikes or treadmills, for which it charges $39 a month, and one that designed for folks who don't own any of its equipment, for which it charges $19.49. The churn rates it discloses are for the former — for people who own its equipment, which it calls its "connected fitness subscribers."

In its IPO filing, Peloton reported that it had a churn rate of just 0.65% per month in its most recent fiscal year, which ended in June. That rate was up slightly from fiscal 2018, when its churn was 0.64%, but down from fiscal 2017, when its rate was 0.7%.

The churn rate Peloton posted in its most recent year works out to be a little less than 7% on annual basis. That's an extraordinarily low figure. Planet Fitness, which operates a chain of gyms, has an annualized churn rate of 18% to 30% — and far higher than that in the first few months after people sign up for a membership, according to a recent report in The Wall Street Journal. Meanwhile, Netflix, long the paragon of a successful digital subscription business, has a churn rate of around 9% a quarter — or about 36% a year — the Financial Times estimated last year, citing several different studies.

Peloton thinks the churn figures are so important that it touts them on the second official page of its filing and talks about its low churn rate some 27 other times.

"Usage drives value and loyalty, which is evidenced by our consistently low Average Net Monthly Connected Fitness Churn," it says in one section of the document. "Our unit economic model benefits from low Average Net Monthly Connected Fitness Churn and high Subscription Contribution Margin," it continues in another section.

But Peloton's churn rate shouldn't be taken at face value, retention experts said.

Its churn rate "doesn't pass the smell test"

By dividing 1 by the churn rate, you can get a rough estimate of how long the average customer sticks with the service before cancelling, said Daniel McCarthy, an associate professor of marketing at Emory University's Goizueta Business School. Doing that calculation with Peloton's customer churn rate implies that the average customer would stay with its service for about 154 months or nearly 13 years, he said.

That's almost twice as long as Pelton has been in existence. It's also far longer than its equipment is likely to last, McCarthy said. And when their bikes or treadmills breakdown, some customers may replace them, but others won't and will likely cancel their service.

The churn rate Peloton gave "doesn't pass the smell test," McCarthy said.

Indeed, Peloton's filing makes clear that the churn rate is almost certainly understated.

For example, the company allows customers to pause the subscription service for as long as three months. But it continues to count those customers as active subscribers even while their subscriptions are paused. Such customers may not have churned yet, but they aren't paying company any money either.

Peloton didn't disclose what portion of its connected fitness subscriber base — which hit 511,202 at the end of June — had paused its subscriptions. Nor did it reveal what portion of those that paused their subscriptions cancelled them right after that interruption of service.

But there's likely a bigger factor at play with Peloton's churn rates. Up until July of last year, the company offered customers the chance to sign up for extended subscription agreements. Customers could sign up for one or two years of service and get anywhere from one to three months for free. Alternatively, customers who used Peloton's financing service to purchase their equipment could include with their purchase a prepaid subscription lasting anywhere from one year to 39 months.

The company didn't disclose how many of its customers are still on those extended subscription plans. But it did say it will still have some customers on them into its 2022 fiscal year. Peloton includes those customers when calculating its churn rate. That's a bit misleading, because it means the churn figure includes people who haven't really had the opportunity to leave yet, Bedford said.

"Why would you leave after you prepaid [for the service] with a great deal?" said Joel Shapiro, an associate professor of data analytics at Northwestern's Kellogg School of Management. "When you talk about churn rate being low," he continued, "you sort of assume that the people in the calculation should be those that actually, arguably, could churn. And when you have somebody who's under contract for two more years, it arguably doesn't make any sense to include them in the calculation."

It's quite likely that as those long-term deals expire, Peloton will see a spike in its churn rates, retention experts said. The company might well be seeing an uptick in subscription cancellations now, one year after it stopped selling its one-year plans, Bedford said.

"There's a whole bunch of people who are coming to the end of the subscription period who may not renew," he said.

New subscribers are likely distorting the picture

Another factor that's likely helping Peloton minimize its churn rate is just the sheer number of new subscribers it has been adding. The number of people subscribing to its connected fitness service more than doubled in each of its last two fiscal years, going from 107,708 in June 2017 to 245,667 in June 2018 to more than 500,000 this past June.

Because the churn rate is derived in part from the number of overall subscribers a company has, even if it's losing a large number of subscribers, the rate can look low if it's consistently adding many more.

"Their [churn] numbers in the early years you would expect to be low," said Dave Rochlin, the executive director of the Innovation, Creativity, and Design Practice at the University of California, Berkeley's Haas School of Business.

What's more, new subscribers are often less likely to cancel a service, because they tend to be the most enthusiastic customers, Rochlin That's particularly true with Peloton, because it's new subscribers have just spent — or are in the process of spending — thousands of dollars on its equipment, he said.

"If you think about the size of investment you're making on that piece of equipment, it's pretty likely you're not going to turn around and cancel service right away," Rochlin said.

That doesn't mean that Peloton has a bad business or that it's done anything wrong in calculating or presenting its churn rate, the retention experts said. But it does mean that investors shouldn't be surprised if that rate starts to tick upward in the near future.

Because of the factors that seem to be playing a role in keeping Peloton's churn rate low, "this all feels a little bit like a game that's being played," Shapiro, of the Kellogg School, said.

Got a tip about Peloton or another company? Contact this reporter via email at, message him on Twitter @troywolv, or send him a secure message through Signal at 415.515.5594. You can also contact Business Insider securely via SecureDrop.

SEE ALSO: Peloton’s CEO once bragged on TV that the company was 'weirdly profitable,' but the startup’s IPO filing reveals years of losses

Join the conversation about this story »

NOW WATCH: I cleaned my entire apartment with 4 of Amazon's highest-rated cleaning robots, but I could've done a much better job myself

FREE SLIDE DECK: The Future of Fintech

Sat, 08/31/2019 - 10:00am  |  Clusterstock

Digital disruption is affecting every aspect of the fintech industry. Over the past five years, fintech has established itself as a fundamental part of the global financial services ecosystem.

Fintech startups have raised, and continue to raise, billions of dollars annually. At the same time, incumbent financial institutions are getting in on the act, and using fintech to remain competitive in a rapidly evolving financial services landscape. So what's next?

Business Insider Intelligence, Business Insider's premium research service, has the answer in our brand new exclusive slide deck The Future of Fintech. In this deck, we explore what's next for fintech, how it will reach new heights, and the developments that will help it get there.

Join the conversation about this story »

In the suburbs of Moscow, 2 winding highways are home to some of Russia's most expensive real estate — and they tell very different tales of the country's wealth

Sat, 08/31/2019 - 9:29am  |  Clusterstock

  • In the suburbs of Moscow, two winding highways are home to some of Russia's most expensive real estate.
  • In Rublyovka, the ritzy suburb surrounding the Rublyovskoye highway, government officials and wealthy businesspeople live in homes that cost up to $80 million, hidden behind high walls lined with security cameras.
  • And in Novorizhskoye, newly built luxury gated communities attract affluent families and celebrities who live in homes that start at $1 million and go up to $50 million.
  • The Rublyovskoye and Novorizhskoye highways represent different versions of Russian wealth.
  • Visit Business Insider's homepage for more stories.

Two highways in the suburbs of Moscow are home to some of Russia's most expensive real estate.

The Rublyovskoye highway and its surrounding area, called Rublyovka, is an ultra-exclusive, leafy suburb home to government officials and old money. Homes can cost up to $60 or $80 million, according to Leonid Nikitskiy, the head of country real estate at Moscow Sotheby's International Realty.

And in Novorizhskoye, newly built luxury gated communities attract affluent families and celebrities who live in homes that start at $1 million and go up to $50 million, according to Nikitskiy.

On a trip to Russia in June, I drove down both of these highways with Nikitskiy.

Here's what it was like.

SEE ALSO: I toured a gated estate outside of Moscow that was built by the 'Trump of Russia.' From its golf course to the mansions I was forbidden to photograph, it wasn't hard to see its appeal for the country's billionaires.

DON'T MISS: The Kremlin is the official residence of President Vladimir Putin. It's protected by an elite military regiment and has walls up to 21 feet thick — here's a look inside.

Rublyovskoye and Novorizhskoye are two winding highways in the suburbs of Moscow that are home to some of Russia's most expensive real estate.

On a trip to Russia in June, I drove down both of these highways with Leonid Nikitskiy, the head of country real estate at Moscow Sotheby's International Realty.

Rublyovka, the ritzy suburb surrounding the Rublyovskoye highway, is home to affluent businesspeople and government officials, including President Vladimir Putin and Prime Minister Dmitry Medvedev.

As we drove down the two-lane, tree-lined highway, I spotted Range Rovers, Land Rovers, Mercedes, Porsches, BMWs, and a Rolls Royce. 

The neighborhoods of Rublyovka are filled with "men with old money and young women who hunt these men," Nikitskiy told me.

When wealthy Russians, such as Siberians with diamond and oil money, come from elsewhere in the country to buy homes in the Moscow area, they only consider Rublyovka.

"It's royal. It's like Chanel," Nikitskiy said. "There's nothing else."

But a major pitfall of living in Rublyovka is the traffic, Nikitskiy says. It's only a two-lane road, and it is shut down almost every day to make way for convoys of government cars carrying the president or the prime minister between their countryside estates and the Kremlin. (Novo-Ogaryovo, Putin's suburban residence, is tucked away behind high walls on a street off the Rublyovskoye highway.)

"You can have a multimillion-dollar house, a Bentley, a Ferrari, but you still have to sit in traffic," Nikitskiy said.

Driving through Rublyovka made it clear what super-rich Russians value most: privacy and security.

I couldn't get a good look at any of the homes because most were surrounded by thick walls lined with security cameras. 

"Many bought their homes here in the 1990s when it was a dark time for Russia," Nikitskiy told me. "They built very high walls and security cameras because they were scared."

Even Sotheby's International Realty couldn't get me into any homes for sale in the area because the owners are too private.

Homes in the area can cost up to $80 million, according to Nikitskiy. In the lavish Mayendorf Gardens suburb of Rublyovka, a 12,000-square-foot mansion with a swimming pool, sauna, and staff apartments is for sale for $62.4 million.

But the most expensive homes may not even be publicly listed, he said. 

"As a rule, transactions over $40-$50 million are not advertised but are realized among a narrow circle of people and their representatives," Nikitskiy said.

Read more: How the ultra-wealthy sell their mansions: Whisper listings


In addition to multimillion-dollar homes hidden away in the trees, Rublyovka has many upscale restaurants and shopping malls.

We passed by Barvikha Luxury Village, which includes Ferrari and Maserati car dealerships, as well as clothing boutiques like Prada, Gucci, Giorgio Armani, and Dolce & Gabbana.

More striking to me than the luxury shops was the sheer seclusion and inaccessibility of living in Rublyovka. If you live there, you likely have generational wealth, according to Nikitskiy.

Novorizhskoye, on the other hand, is home to celebrities and affluent families who want an easy commute to Moscow but the same fresh air and greenery that can be found in Rublyovka.

According to Nikitskiy, the area around Novorizhskoye highway is becoming more popular partially because it's much wider than Rublyovka, making it quicker to drive back and forth to Moscow.

From parts of Novorizhskoye, you can drive to Moscow without stoplights, Nikitskiy said, and some people take helicopters from their suburban homes to a heliport just outside of Moscow, and then drive the remaining 15 minutes into the city.

In recent years, Novorizhskoye has seen an explosion of development by Villagio Estates, a luxury real-estate developer that claims to be the largest in Russia.

Villagio Estates has built up several luxe gated communities along the Novorizhskoye highway that have names like "Cote d'Azur" and "Madison Park."

On my trip to Russia, I spent a day getting a tour of some of these estates, which have perfectly manicured lawns, sparkling fountains, and imported sand from the Maldives on manmade beaches. Many homes are surrounded by hedges and ornate gates.

While these communities were also protected behind gates, the houses themselves were much more visible and accessible than the ultra-private, high-security communities in Rublyovka.

I got the feeling that people who live in these communities don't mind showing off their wealth a little bit — to their similarly wealthy neighbors, that is.

Prices in Novorizhskoye are quickly catching up to Rublyovka, Nikitskiy said. Home prices start at around $1 million and can go up to $40 or $50 million.

An opulent 10-bedroom home with an indoor pool and peacock-filled gardens in a Novorizhskoye suburb is for sale for about $25 million.

While the communities surrounding both highways were clearly affluent, based on what I saw, Rublyovka is clearly more "old money" while Novorizhskoye represents a younger and flashier type of wealth.

Inside $50 billion hedge fund D.E. Shaw ahead of a key deadline; A chat with Industrious' CEO

Sat, 08/31/2019 - 9:15am  |  Clusterstock


Hi everyone! 

I can't believe it is Labor Day weekend already. While this week was relatively quiet in New York with so many people on vacation, the finance team still had a number of important stories (and many more coming next week!). 

We took you inside the talent war brewing at hedge fund D.E. Shaw, we dug into the Peloton S-1 to reveal the streaming fitness services' major risks, and we gave you a look at how Amazon is getting creative (think race cars) to introduce its cloud clients to machine-learning technology. 

If you aren't yet a subscriber to Wall Street Insider, you can sign up here.

In one of the more unusual stories from this week (and a great example of the work we're doing with our new real estate beat), we reported on fundraising for a startup called Salaryo which provides financing for small businesses and startups to pay their security deposits on coworking spaces.

While the amount Salaryo raised was small ($5.5 million), the company is trying to build on some of the momentum in the coworking space that saw Industrious raise $80 million and Knotel secure $400 million in financing in the last week alone. And that's on top of WeWork's $47 billion valuation. 

So if Salaryo is lending money to small companies to get fancy office space, does that mean we wont have any more multi-billion companies like Apple and HP that were founded out of garages? Are founders now going to be prioritizing securing swanky digs over putting that funding back into building their business? 

Separately, don't forget to register for our Prime webinar with marijuana-analytics company Headset.

Earlier this year, Headset raised $12 million and signed deals with market-research firm Nielsen and the accounting firm Deloitte.

You can join Headset CEO Cy Scott for a BI Prime webinar on September 5 at 2 p.m. ET as he takes readers through his pitch deck and explains how he convinced VCs, including early Juul investor Poseidon Asset Management, to buy in.

Poseidon partner Emily Paxhia will also weigh in on the unique challenges of investing in cannabis — and how she picks winners in a crowded market. You can sign up here.

Have a great long weekend! 


D.E. Shaw asked staff to sign a take-it-or-leave noncompete, and the deadline is weeks away. Insiders say some people could walk even after management improved the payout.

D.E. Shaw has relaxed terms of its deferred-compensation structure ahead of a mid-September deadline on the firm's new noncompete contract for all investment staff to either sign the agreement or get fired, insiders said.

The move spotlights uncertainty inside D.E. Shaw as it prepares to enforce wide noncompetes, which are fairly common in the hedge-fund industry, for the first time in its 30-year history. At stake is the $50 billion hedge-fund manager's investment talent — sources told Business Insider how longtime employees were assessing the terms and weighing if it makes sense to get pushed out and join a competitor.


UBS's Americas private-wealth head says he thinks losing a 'few hundred' advisers would not be a bad thing, and is looking at how robos can help keep the bank's richest clients

The UBS wealth-management executive John Mathews is so encouraged by a collaboration with SigFig on a digital-wealth tool for smaller accounts that he's looking at what can be done for wealthier clients, particularly when it comes to the next generation.

Mathews, who leads UBS's private-wealth management and ultra high-net-worth business for the Americas, spoke about digital capabilities and adviser head count with Business Insider.


Alternative data provider Quandl is changing its strategy as industry giants like Bloomberg and S&P push into the $7 billion market

The alternative-data provider Quandl is making a push toward creating more proprietary data feeds as large traditional data providers like Bloomberg and S&P push further into their space.

Tammer Kamel, Quandl's CEO and cofounder, told Business Insider it's gotten very difficult to obtain exclusive rights to alt-data feeds because of the increase in competition from larger players.


How Morningstar is using machine-learning race cars from Amazon to train employees

Pop into Morningstar's Chicago headquarters and you might see something unexpected: A group of employees cheering on what appears to be a remote-controlled toy car racing around a track.

It's not all fun and games, though. Morningstar, one of the world's biggest investment-research companies, is turning to machine-learning-guided cars to learn about ways to better pull and analyze data.

Amazon Web Services has been using the DeepRacer cars to introduce clients on its public-cloud services to machine-learning technology. Wall Street firms, meanwhile, are talking more about wading into the public cloud and uses for artificial intelligence.


Industrious' CEO tells us why the coworking startup is ditching leases and managing property instead. Bigger rival WeWork is eyeing a similar pivot to help erase losses.

Industrious, which just nabbed $80 million in fresh funding, is moving away from signing traditional leases and doing more partnerships with landlords instead.

The latest funding round for Industrious came little more than a week after coworking giant WeWork unveiled its detailed financials — a key step towards an IPO that also revealed $47 billion in future lease obligations and a nearly $2 billion loss in 2018.

We spoke with the coworking company's CEO and co-founder, Jamie Hodari, who explained how that approach works and why he thinks it can help Industrious become profitable.


In markets:

In tech news:

Other good stories from around the newsroom:

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'Big Short' investor Michael Burry was among the few who predicted the 2008 housing collapse. Here are his biggest investments right now.

Sat, 08/31/2019 - 9:00am  |  Clusterstock

  • Michael Burry, of "The Big Short" fame, foresaw the 2008 housing meltdown and bet against the subprime-mortgage bonds that exacerbated the crisis.
  • Burry now runs his own hedge fund — Scion Asset Management — out of Cupertino, California.
  • Listed below are his firm's 15 largest investments, according to data compiled by Bloomberg.
  • Visit the Markets Insider homepage for more stories.

Michael Burry earned millions by betting against subprime-mortgage bonds in advance of the 2008 housing meltdown. 

His short trade was popularized by Michael Lewis' bestselling book "The Big Short," and the movie in which he was portrayed by Christian Bale. 

These days, he runs Scion Asset Management, a Cupertino, California-based hedge fund that owns $93.6 million worth of assets.

He hasn't stopped sounding alarms where he sees them. Most recently, Burry warned that passive investing is a "bubble."

His comments related to the trend of hedge funds and index-fund managers piling into a small collection of large-cap companies. The consolidation of capital leaves smaller growth stocks desperate for cash, Burry said.

"The bubble in passive investing through ETFs and index funds as well as the trend to very large size among asset managers has orphaned smaller value-type securities globally," he told Bloomberg.

Burry is doing some active stock picking of his own, and recently told Barron's he was going long on GameStop.

The list below shows his firm's 15 largest positions by descending order of market value, according to data from regulatory filings and news reports compiled by Bloomberg.

Markets Insider is looking for a panel of millennial investors. If you're active in the markets, CLICK HERE to sign up.

1. Autech

Market value: $14.76 million

Position: 1,500,000 shares

Ownership stake: 9.75% of shares outstanding

Year-to-date performance: up 13%

Source: Bloomberg

2. Western Digital

Market value: $13.77 million

Position: 250,000 shares

Ownership stake: .08% of shares outstanding

Year-to-date performance: up 54%

Source: Bloomberg

3. GameStop

Market value: $12.69 million

Position: 3,000,000 shares

Ownership stake: 3.32% of shares outstanding

Year-to-date performance: down 68%

Source: Bloomberg

4. Alphabet Inc. Class C

Market value: $10.74 million

Position: 9,000 shares

Ownership stake: <0.01% of shares outstanding

Year-to-date performance: up 14%

Source: Bloomberg

5. Tailored Brands

Market value: $9.66 million

Position: 2,600,000 shares

Ownership stake: 5.15% of shares outstanding

Year-to-date performance: down 61%

Source: Bloomberg

6. FedEx

Market value: $9.45 million

Position: 60,000 shares

Ownership stake: .02% of shares outstanding

Year-to-date performance: down 1%

Source: Bloomberg

7. Sansei Technologies

Market value: $9.39 million

Position: 1,104,000 shares

Ownership stake: 5.71% of shares outstanding

Year-to-date performance: down 50%

Source: Bloomberg

8. Cleveland-Cliffs

Market value: $8.77 million

Position: 1,100,000 shares

Ownership stake: .41% of shares outstanding

Year-to-date performance: up 3%

Source: Bloomberg

9. Alibaba

Market value: $8.64 million

Position: 50,000 shares

Ownership stake: <0.01% of shares outstanding

Year-to-date performance: up 27%

Source: Bloomberg

10. Cardinal Health

Market value: $8.45 million

Position: 200,000 shares

Ownership stake: .07% of shares outstanding

Year-to-date performance: down 4%

Source: Bloomberg

11. Walt Disney Co.

Market value: $8.27 million

Position: 60,000 shares

Ownership stake: <0.01% of shares outstanding

Year-to-date performance: up 25%

Source: Bloomberg

12. Sportsman's Warehouse Holdings

Market value: $6.52 million

Position: 1,597,011 shares

Ownership stake: 3.71% of shares outstanding

Year-to-date performance: down 4%

Source: Bloomberg

13. Yotai Refractories

Market value: $6.35 million

Position: 1,280,000 shares

Ownership stake: 5%

Year-to-date performance: down 9%

Source: Bloomberg

14. Tazmo

Market value: $6.03 million

Position: 686,800 shares

Ownership stake: 5.08%

Year-to-date performance: up 39%

Source: Bloomberg

15. Ezwelfare

Market value: $4.72 million

Position: 574,000 shares

Ownership stake: 5.27% of shares outstanding

Year-to-date performance: up 30%

Source: Bloomberg

It looks like Trump lied about the trade war to boost stock markets — his bluster may soon start falling on 'deaf ears'

Sat, 08/31/2019 - 4:35am  |  Clusterstock

  • On Wednesday CNN reported that Trump may have made up high-level phone calls to China in order to boost markets. 
  • Trump said his administration had spoken with China, but his aides say he intended to boost the markets with the comments.
  • And China said the calls never happened.
  • "I already think we're less responsive to these kinds of claims," said Craig Erlam, senior market analyst at Oanda.
  • View Markets Insider's homepage for more stories. 

On Monday, Trump told reporters that he held "high-level talks" with China about the trade war, adding "this is the first time I've seen them where they really want to make a deal."

Global stocks instantly reversed what looked to be another day of heavy losses, following the Dow's 600 point drop on the previous Friday. His comments soothed anxious investors. 

But China said that those talks never actually happened. And CNN reported that: "Instead, two officials said Trump was eager to project optimism that might boost markets and conflated comments from China's vice premier with direct communication from the Chinese."

All leaders want their markets to do well, and exaggerating successes and wins is hardly a tactic exclusive to Trump. But markets are currently at a particularly precarious state, with multiple red flags warning of a potential recession. And traders may be beginning to wonder how long they can afford to play along with Trump's optimism.

"I already think we're less responsive to these kinds of claims, but not entirely so," said Craig Erlam, senior market analyst at Oanda to Markets Insider in an email. "As ever with these things, it's difficult to know to differentiate between truth, lies, and exaggeration. Markets will often give more credence to reports that have come from credible sources or been verified but there are circumstances like this when we're left guessing." 

So it might not be long before traders stop playing to Trump's optimism — Erlam added: "It's difficult to say how long that will last, but the more his claims go unverified or denied, the more they'll fall on deaf ears."

Also, the trade war shows no signs of abating, no matter what Trump says. That's why Trump's "rhetoric" should be viewed "with the utmost caution," Han Tan, Market Analyst at FXTM, said in an email to Business Insider on Monday, when markets rallied on the Trump tweets.

"Investors are well aware that multiple rounds of trade talks have only led to the current dismal situation, whereby repeated tariff threats have become the norm."

See More: Trump may have made up 'high-level' Chinese phone calls at the G7 summit to boost jolted markets

Join the conversation about this story »

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