Analyzing the top news stories across the web

Oct. 2 2014 9:16 AM

Crumbling Infrastructure and Traffic are Costing Every L.A. Driver $2,500 a Year

This article originally appeared in Business Insider.

Crumbling infrastructure alert!

A new report from TRIP, a Washington, D.C., transportation research group, finds that Los Angeles motorists are each spending an extra $2,458 per year due to poor roads and bridges.

And that's just the City of Angels.

"Roads and bridges that are deficient, congested or lack desirable safety features cost California motorists a total of $44 billion statewide annually," the report concludes.

The report's authors are unflinching in their recommendations:

With a current unemployment rate of 7.4 percent and with the state’s population continuing to grow, California must improve its system of roads, highways and bridges to foster economic growth and keep businesses in the state. In addition to economic growth, transportation improvements are needed to ensure safe, reliable mobility and quality of life for all Californians. Meeting California’s need to modernize and maintain its system of roads, highways and bridges will require a significant boost in local, state and federal funding.

The situation with California's roads is especially grim. TRIP breaks it down:

  • Thirty-four percent of California’s major roads and highways have pavements in poor condition, while an additional 41 percent of the state’s major roads are rated in mediocre or fair condition and the remaining 25 percent are rated in in good condition.
  • Roads rated in poor condition may show signs of deterioration, including rutting, cracks and potholes. In some cases, poor roads can be resurfaced, but often are too deteriorated and must be reconstructed.
  • Driving on rough roads costs all California motorists a total of $17 billion annually in extra [vehicle operating costs]. Costs include accelerated vehicle depreciation, additional repair costs, and increased fuel consumption and tire wear.

In addition to flat tires from potholes, poor road conditions are also costing motorists in the Golden State time. 

Los Angeles and San Francisco-area residents are no strangers to traffic, but they probably won't be happy to learn that drivers in and around both cities are losing 61 hours a year to congestion. That's more than two days.

California is carland, but I can identify with whatever astonishment the people who live and drive in the state are experiencing, given TRIP's findings. I lived there for a decade and saw firsthand a lot of the decay, and suffered through the traffic delays on a regular basis. 

In a state whose economy is bigger than most countries, this is a major challenge.

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Oct. 1 2014 12:21 PM

How One Entrepreneur Is Transforming Blood Testing

This article originally appeared in Business Insider.

The next time you get a blood test, you might not have to go to the doctor and watch vials of blood fill up as the precious fluid is drawn from your arm. No more wondering to yourself, "Ah, how much more can they take before I pass out?" Instead you might be able to walk into a Walgreens pharmacy for a reportedly painless finger prick that will draw just a tiny drop of blood, thanks to Elizabeth Holmes, 30, the youngest woman and third-youngest billionaire on Forbes' newly released annual ranking of the 400 richest Americans.

Revolutionizing the blood test is a golden idea. Because of new testing methods developed by Holmes' startup Theranos, that lone drop can now yield a ton of information. The company can run hundreds of tests on a drop of blood far more quickly than could be done with whole vials in the past—and it costs a lot less.

A Billion-Dollar Idea

Holmes dropped out of Stanford at 19 to found what would become Theranos after deciding that her tuition money could be better put to use by transforming healthcare.

Traditional blood testing is shockingly difficult and expensive for a tool that's used so frequently. It also hasn't changed since the 1960s.  It's done in hospitals and doctors' offices. Vials of blood have to be sent out and tested, which can take weeks using traditional methods and is prone to human error. And, of course, sticking a needle in someone's arm scares some people enough that they avoid getting blood drawn, even when it could reveal lifesaving information.

Holmes recognized that process was ripe for disruption. It took a decade for her idea to be ready for primetime, but now it seems that her decision to drop out was undoubtedly a good call. Last year, Walgreen Co. announced that it would be installing Theranos Wellness Centers in pharmacies across the country, with locations already up and running in Phoenix and Palo Alto, California. And Holmes has raised $400 million in venture capital for Theranos, which is now valued at $9 billion (Holmes owns 50 percent).

The other two 30-year-olds on Forbes' List, Facebook founder Mark Zuckerberg and his former roommate and Facebook CEO Dustin Moskovitz, also have access to a wealth of information about people—but their data is less likely to directly save a life.

Elizabeth Holmes holds up her invention

Courtesy of Theranos

How It Works

One closely guarded secret is what MedCityNews calls "the most interesting part of [the Theranos] story": how exactly the technology behind its blood test works. The company's methods are protected by more than a dozen patents filed as far back as 2004 and as recently as last week.

In an interview with Wired, Holmes hinted at some of the key ideas behind Theranos. "We had to develop ... methodologies that would make it possible to accelerate results," she said. "In the case of a virus or bacteria, traditionally tested using a culture, we measure the DNA of the pathogen instead so we can report results much faster."

While we can't yet assess independently how well that method works when compared with traditional blood tests, it already seems to be upending the old way of doing things.

Why Blood Tests?

Holmes told Medscape that she targeted lab medicine because it drives about 80 percent of clinical decisions made by doctors. By zeroing in on the inefficiencies of that system, the Theranos approach completely revolutionizes it.

The new tests can be done without going to the doctor, which saves both money and time. Most results are available in about four hours, which means that you could swing by a pharmacy and have a test done the day before a doctor's visit, and then the results would be available for the physician. Quick tests that can be done at any time are already a total change, but the amount of data the company can get from a single drop of blood is amazing.

Blood samples have traditionally been used for one test, but if a follow-up was needed, another sample had to be drawn and sent out—making it less likely that someone would get care. The Theranos approach means the same drop can be used for dozens of different tests.

It's cheap, too. One common criticism of the healthcare system is that the pricing structure is a confusing labyrinth that makes it impossible to know how much anything costs. Theranos lists its prices online, and they're impressive. Each test costs less than 50 percent of standard Medicare and Medicaid reimbursement rates. If those two programs were to perform all tests at those prices, they'd save $202 billion over the next decade, Holmes said in an interview on Wired

Plus, people get access to their own results. As an example of how helpful that can be, Holmes told Wired that Theranos charges $35 for a fertility test, which is usually paid for out-of-pocket and costs up to $2,000. But she also said that this data could be useful for anyone looking to gain a better understanding of his or her health. "By testing, you can start to understand your body, understand yourself, change your diet, change your lifestyle, and begin to change your life," she said.

Sept. 29 2014 3:48 PM

Why the New York City Greenmarket Is Great for Small Farms

This article originally appeared in Business Insider.

Over the last century, American farming has experienced a consolidation towards large agricultural corporations. In 1935, there were approximately 6.8 million farms in the United States. By 2000, that number had plummeted to 2.2 million. Today, we're down to 2.1 million. Meanwhile, the highest income bracket for farms now accounts for 66.4 percent of US agricultural products sold, up from 47.5 percent in 2002.

In this age of corporate agriculture, family farms that have survived have done so by capitalizing on the local food movement: selling to organic and specialty supermarkets, selling wholesale to restaurants, selling shares of a farm's harvest directly through community-supported agriculture (CSAs), and selling at farmer's markets.

We talked to one local farmer who has managed to adapt and thrive in this challenging environment: Kevin Smith of upstate New York’s Sycamore Farms. Sycamore, like many in the Northeast and Mid-Atlantic states, has turned nearly exclusively to one source for revenue: the New York City Greenmarkets.

The New York City Greenmarket was founded in 1976 by New York City architect Barry Benepe to support local farms that were too small to sell to wholesalers. What began as a one-day-a-week farmer's market in Union Square supporting seven farmers has exploded. Today, the Greenmarket runs 52 farmer's markets in different locations in the city, supporting 240 farmers in seven states. 

"We cut out the middle man between producers and consumers by providing regional farmers direct access to their customers," Michael Hurtwitz, the director of the Greenmarkets for GrowNYC, told Business Insider. 

Sycamore was one of the first farms at the market, joining up in 1981. Henry Smith, the founder of Sycamore Farms and Kevin’s father, recognized the potential of the Greenmarket early.

Everyone was bragging about how much money there was in the greenmarkets and so we went down to see if there was any money left," Henry told The Times Herald Record last year.

It turned out there was, not just for Sycamore but for other farms as well. According to Hurwitz, the overwhelming majority of farms that sell at the Greenmarket derive their main source of income from the markets. 85 percent of the Greenmarket farmers told Hurwitz they would be out of business if it weren't for the markets.

Today, the Union Square market, Greenmarket's flagship market and the only one that Sycamore attends, runs four days a week, year round. On an average September Friday, 360,000 people pass through the market. More pass through on Saturdays. While other Greenmarket locations are equally lucrative, no other market has that kind of foot traffic. 

The Hard Numbers Of Small Farms Today

Sycamore hosts a stand at the Greenmarket three days a week, from June until November. In a typical week, the stand sells approximately 5,100 ears of corn and 5,000 pounds of tomatoes, as well as other produce, baked goods, and preserve, according to Smith. On a single day, Sycamore will sell to about 1,000 customers.

During a good year, Sycamore’s Greenmarket sales come out to about $15,000 to $25,000 per week during the selling season, which comes out to approximately $300,000 to $500,000 income.

That sounds like a lot until you start factoring in costs. Property taxes alone figure to be above $20,000. Operating costs for materials, equipment, and maintenance can be $100,000 to $250,000. Once you add in hourly wages (between $10 to $15/hour) for seven farm employees, liability insurance, farm insurance, employment insurance, and disability insurance, it becomes clear: margins can get very tight depending on the year.

While sales are generally constant year to year, running a farm today is as unpredictable as it ever was. Different weather conditions can wreak havoc on a season in different ways. A rainy season can make crops thrive, but it can also slow traffic at the Greenmarket or even shut the market altogether. Too little rain and some crops will have difficulty growing, but there are more days to sell at the market.

As the national climate for small farms has stiffened, the Greenmarket has expanded its reach. In just the last seven years, the market has increased from 174 farmers to 240 and 44 markets to 52. According to Hurwitz, overall revenue at the markets has increased during that time and a number of farmers have told him that last year was their highest-grossing year ever.

Part of the boom is due to what Hurwitz calls "an explosion in demand for local."

Smith has observed the same trend: “Customers today are more interested, engaged, and knowledgeable. 99 percent are repeat visitors and I never have to hard-sell the produce."

Even a decade ago, Smith spent countless time at the market trying to explain to customers why his local produce cost more than supermarket produce, often to no avail. Customers were baffled or frustrated and tried to haggle the price down. Today’s urbanites are obsessed with anything locally-sourced, organic, and especially farm-to-table, which Sycamore and other local farms are perfectly positioned to capitalize on. The flood of interest in farm-to-table has its downsides though.

“Because the demand is there, there’s way more competition at the Greenmarket and outside of it,” says Smith.

CSAs, co-ops, food boxes, gourmet grocery stores, Whole Foods, and non-Greenmarket farmer’s markets (some that have "Don't Ask, Don't Tell" policy for where sellers get their produce) have sprung up are all over Brooklyn and Manhattan. Factor in the proliferation of farmers at the Greenmarkets themselves and its clear that local food has become a crowded market.

Nonetheless, no trend lasts forever. The Greenmarket similarly boomed in the early 1990s, when Henry Smith once boasted of selling 14,000 ears of corn in a single day. By the late ‘90s, however, overblown fears about the unhealthiness of carbs killed the corn market in Manhattan.

With that in mind, Smith has kept margins tight by reinvesting Sycamore's profits back into the business—“the Amazon plan,” he calls it. The Greenmarket has been good to Sycamore, but Smith is smart enough to recognize that relying solely on one revenue source is a bad business model.

Building A New Business Model 

Until five years ago, the farm’s income was 100 percent derived from the Greenmarket. Today, that percentage has been scaled back to 90 percent.

Towards that effort, Sycamore opened a 4,000-square-foot farm stand on site last year. At the farm stand, Sycamore sells its freshest produce, as well other locally-sourced produce from farms in the area that they trust. In addition, they now sell cooked and processed items made in their own kitchen and bakery, such as jams, jellies, pickles, tomato sauces, fruit pies, breads, and very popular tomato pies.

Smith is also looking to expand Sycamore’s presence at the market to year-round, selling the farm’s processed items during the winter months to stay in front of New Yorkers' faces and promote the farm stand.

Currently, Smith has been organizing events to get people to the farm: chef’s dinners using Sycamore produce, potlucks, and educational events for both young children and adults. He promotes the   on social media and always talks up the farm stand at the Greenmarket. While he’s only in the beginnings of his grassroots efforts, Smith envisions a day when the stand gets enough foot traffic that Sycamore can stop trekking to Manhattan altogether. It will require a redoubled presence at the Greenmarket to get the message out to the people that care.

Sept. 26 2014 1:24 PM

Apple BendGate Truthers Smell a Media Plot

This article originally appeared in Business Insider.

Were news reports that the iPhone 6 is prone to bending actually a plot orchestrated by mainstream media? That's what some Apple fans are starting to say after forensically analyzing the original video that broke the BendGate story.

Here is a breakdown of the theory that suggests Apple is merely the patsy in a wider conspiracy to defame the company's not-bendable products. As Pocket-Lint reports, there may be something strange going on with the time shown on the iPhone 6 in the original video that caused the story to go viral. Reddit user "akrosdabay" has written this analysis of why people are starting to call foul over BendGate:

When he is bending it with his bare hands, the phone shows 2:26 p.m. Then, talking about it that later claiming it has bent as a consequence of his actions earlier in the video, the phone shows 1:58 p.m. Then later when he is summarizing, the time on the phone is 1:58 - 2:00 and has a bend in it. Then it shows 2 p.m. and the phone is straight with some possible damage near the volume button. 

Stocktwits/Clock Work

Canadian YouTuber user Unbox Therapy created the video, and Apple fans are beginning to accuse him of subterfuge to inflate just how bad the bending issue is. 

Reddit user "tittywagon" was one online commenter who is skeptical of BendGate: "The hoodie, glasses, backwards hat. The guy is a side-show idiot who blew it way out of proportion for YouTube views."

The "iPhone In Canada" blog goes one step further, blaming mainstream media for the controversy: "Bendgate actually happened in 2012—but was missed by the mainstream media."


Reports had surfaced in 2012 that said the iPhone 5 was susceptible to a similar kind of bending as the iPhone 6 Plus. However, the issue didn't gain anywhere near as much attention as the current controversy.

Apple has weighed in on BendGate in a decisive manner. On Thursday the company revealed how it puts devices through a number of stress tests, allowing CNBC to film the company's testing facility. 


A statement was also emailed to Business Insider that played down concerns over a widespread structural issue with the iPhone 6. Apple told us that "through our first six days of sale, a total of nine customers have contacted Apple with a bent iPhone 6 Plus."

Apple's full BendGate statement is below:

Our iPhones are designed, engineered and manufactured to be both beautiful and sturdy. iPhone 6 and iPhone 6 Plus feature a precision engineered unibody enclosure constructed from machining a custom grade of 6000 series anodized aluminum, which is tempered for extra strength. They also feature stainless steel and titanium inserts to reinforce high stress locations and use the strongest glass in the smartphone industry. We chose these high-quality materials and construction very carefully for their strength and durability. We also perform rigorous tests throughout the entire development cycle including 3-point bending, pressure point cycling, sit, torsion, and user studies. iPhone 6 and iPhone 6 Plus meet or exceed all of our high quality standards to endure everyday, real life use.
With normal use a bend in iPhone is extremely rare and through our first six days of sale, a total of nine customers have contacted Apple with a bent iPhone 6 Plus. As with any Apple product, if you have questions please contact Apple.

Sept. 25 2014 1:51 PM

Is Apple Accident-Prone?

This article originally appeared in Business Insider.

The screw-ups at Apple keep on coming.

The company whose "philosophy's always been to be the best, not the first," as CEO Tim Cook said recently, is going through a rare period in which it just looks accident-prone. Apple's launch of iPhone 6 and iPhone 6 Plus has been dogged by these unfortunate incidents:

Apple will roll on regardless, of course. These are the kinds of glitches that any big company goes through. iPhone 6 will probably turn out to be the biggest, most successful launch of Apple's history, producing a record influx of revenues. (We asked Apple for comment, but its spokespersons were silent at the time of writing.)

Some of Apple's problems are mere optics. The warrant issue—in which cops believe that Apple's new security will prevent them from solving murders and kidnappings—is mostly just a PR issue. In fact, it's likely that Apple will actually respond to warrants and cops still have a way in to your locked iPhone, so this whole idea that it's not technically feasible for Apple to respond to warrants is simplistic at best and misleading at worst.

Others go to Apple's core: To release an operating system update that prevents a phone from being used as a phone, and then to retract it, is a shocker. It's a basic, fundamental, product-use error that causes users needless headaches. Consumers will have to hook their phones up to their laptops and reinstall an older version of the system from a backup. That's asking a lot from non-tech consumers (like your parents). It's the kind of thing PC users used to curse Microsoft for, back in the days when that company used to ship bug-filled Windows updates.

And the fact that Find My iPhone was susceptible to the most basic hacking technique—repeatedly entering new passwords until you get it right—also seems careless.

Apple is the company in which everything "just works," the brand that prides itself on being thoughtful and careful and obsessed with details. And its slip is showing.

We'll forget all about this in a month or two, of course. In addition to roaring iPhone 6 sales, there is one other thing that indicates the Apple ship is basically heading the right way: Since the new product launch on Sept. 9, the stock is up nearly 4 percent to $101.75.

Sept. 24 2014 1:51 PM

A Degree in “Unmanned Aircraft Systems” Might Pay Big

This article originally appeared in Business Insider.

If you want to pull in a six-figure salary right out of school, you might want to start studying unmanned aircraft systems, more commonly and controversially known as drones.  The young field is already lucrative—$11.3 billion globally—and set to grow exponentially. The Association for Unmanned Vehicle Systems International, a trade organization, predicts that the global market will be $140 billion in 10 years.

Studying UAS is relatively new, too. The University of North Dakota started offering the first bachelor's degree program in 2009, with other public schools like Kansas State and aviation-oriented private schools like Embry-Riddle following suit. In total, 30 universities now offer UAS degree programs, with community colleges offering two-year degrees as well.

While most of the news about UAS centers around their military applications, experts say the growth is going to come through private work in the US, whether it's farmers inspecting fields, meteorologists investigating hurricanes, or construction workers surveying sites.

Kurt Barnhart, who oversees Kansas State's UAS program, says that most of the program's graduates head to work for government contractors with military applications, many of which send grads overseas on deployment. But there's also an uptick of those joining US-based startups, he says.

The high salaries relate to the specialization and travel that comes with the job. "If it involves overseas deployment, starting salary is close to six figures, $80,000 plus deployment pay, an additional compensation package for being deployed and having to spend six months out of the year sequestered away in Afghanistan," Barnhart says.  Domestic jobs — with startup companies like Roboflight or Precision Hawk—start at about $60,000 a year. Compare that with first-year pilots of conventional aircraft; they start out at as low as $21,000 a year

Philip Ellerbroek, Roboflight's global director of sales, says that charting a career in UAS requires understanding the facets of the field. You could design the hardware itself, train in piloting the aircraft, or write software code to make the whole thing work. You also have to factor in scale of the vehicle itself: Flying a hobbyist plane won't require a degree, but if you want to pilot a $4 million military device like a Predator, you need specialization. 

Ellerbroek advises would-be UAS grads to get close to the companies in the field, because a formal education won't give you all the knowledge you need. "Like everything else, you can't learn it all in a classroom or a book," he says. "You need to a do an internship, tinker a lot on your own, or read a lot online."  His favorite online resource: DIYDrones, started by Chris Anderson, the former Wired editor-in-chief who started 3D Robotics, perhaps the "it" startup in the field.

What You Learn When You're Getting A UAS Degree

Ben Trapnell runs the UAS program at the University of North Dakota, the first of its kind when it started in 2009. After completing the program—which investigates the systems involved in the air and on the ground for a UAS; how to take photographs and other forms of remote sensing; and commercial-grade flight simulation—students become commercially certified pilots.  "Many students get a flight instructor certificate as well," Trapnell says. "It's proven to be a real hiring advantage—companies want them to teach UAS to other employees."

UND students have received starting salaries of over $60,000, he says. That figure doubles or triples if they go overseas. But UND isn't just trying to develop operators of aircraft. It also aims to train people to build the devices themselves.  "We're not trying to develop the operators," he says, "but develop the skill sets our grads need so they can become leaders in civil UAS that's developing. What they're going to do is hopefully percolate to the top and be the leaders of the civil UAS, and bridge the gap between engineering and the pure operators."

Sept. 23 2014 10:03 AM

Watch Steve Jobs Tell Michael Dell, “We’re Coming After You”

This article originally appeared in Business Insider.

For some reason, this old clip of Steve Jobs resurfaced last week. It's amazing. 

The clip is from 1997, and it shows Jobs responding to Michael Dell who said, Apple should shut down the company and return money to shareholders. Jobs says he thought that was "rude." And then, he says, "We're coming after you buddy."

It's a good reminder that Apple was an underdog that need to fight for its life back then:

Sept. 22 2014 1:29 PM

The iPhone 6 Is a Magical Profit Machine for Apple

This article originally appeared in Business Insider.

A realization is gradually setting in for Apple investors, customers, and devotees: Apple has basically, quietly, raised the price of the new iPhone. How? By shipping the basic model iPhone 6 and 6 Plus with such limited memory that buying one would be like buying a Porsche with a VW Beetle engine.

As Apple guru John Gruber pointed out last week, Apple is selling the basic $199 iPhone 6 and $299 iPhone 6 Plus with only 16 gigabytes of memory. That amount of base memory first shipped with the iPhone 3GS, a now discontinued phone from the smartphone Triassic age.

In the four years since Apple launched the 3GS, smartphones have become much bigger storage hogs. With the latest Apple mobile operating system (iOS 8), many-megapixel video and still cameras, HD movies, and TV shows, and ever-more-complex apps, 16 gigs is now an annoyingly small amount of storage. Unless you aggressively and fanatically manage what's on your iPhone—moving photos and movies to the cloud (where you have to pay for additional storage), deleting little-used apps, etc.—you're constantly going to run out of room. And that will create endless headaches and frustrations, which is not what you want and expect from a new iPhone.

The answer for most people will be to spring for more storage. And here, too, Apple has cleverly created an even bigger incentive to pony up. The new iPhones come with bigger supplemental tiers of storage than the earlier iPhones. Specifically, iPhone 6s comes with 16 GB, 64 GB, and 128 GB of storage, instead of the 16 GB, 32 GB, and 64 GB of prior models. 

So, the decision-making logic for most iPhone buyers will probably go like this:

  • I can get my new iPhone for $199 or $299 (depending on screen size), enjoy the bigger screen for five minutes, and then spend the next two years tearing my hair out about the tiny storage, OR
  • I can shell out an extra $100 to buy four times as much storage.

When you amortize that $100 investment over the life of the phone, it's a small expense relative to the improved satisfaction. So many, many customers will most likely opt for option two.

Here's where more of the hidden genius comes in. According to Wall Street analyst Gene Munster and BI Tech Editors Jay Yarow and Dave Smith, the cost to Apple of 64 GB of memory vs. 16 GB of memory is small. Specifically, it's about $20. That means that, for every customer persuaded to spend an extra $100 to buy the 64GB iPhone 6 (or 6 Plus), Apple will make an extra $80 in profit. That's a lot of extra profit.

And because 16 GB is so little storage for customers who take a lot of pictures or movies, use a lot of apps, and/or watch a lot of movies or TV shows, they basically have no choice but to buy the 64 GB version. And that means that Apple has basically, quietly, jacked up the price and profit margin of its new iPhones. This in a market in which smartphone prices are dropping fast and most manufacturers are fighting to survive.

Piper Jaffray's Gene Munster did a survey of iPhone buyers over the weekend and found that only one in five customers were buying the 16 GB version of the iPhone 6, about half as many as bought the entry-level phone in the previous cycle. That bodes very well for the average selling price of this device. And it bodes even better for the amount of cash that Apple is going to drop to the bottom line over the next year as most of their customers upgrade to the iPhone 6.

And in case you're not impressed by that quiet pricing/profit magic, consider this: Apple is already collecting another extra $100 from every customer who wants the bigger-screened iPhone 6 Plus. Those start at $299, not $199. And it's unlikely that the bigger-screened iPhone 6 Plus costs anything close to another $100 to make. So Apple is most likely picking up another chunk of incremental profit there, too.

Now, selling the iPhone 6 and 6 Plus with such limited storage is not the most customer-friendly move that Apple could have made. Apple could have put 32 GBs of storage into the basic phone, vastly improved the phone, and saved many of its customers $100. Apple's decision to put only 16 GBs of memory in the 6s, in fact, so disappointed Apple guru John Gruber that he called this decision "the most disappointing aspect" of the new iPhone.

But Apple has always been as focused on its own bottom line as it is on making its customers happy. And Apple, probably correctly, is betting that almost all of its customers and potential customers will get over their annoyance, pony up, and help fatten Apple's bottom line.

All this bodes very well for Apple for the next few quarters.

Disclosure: I am overweight Apple stock, and I am looking forward to getting my new iPhone (though I'm not looking forward to paying an extra $100 for it). I think this will be the last huge iPhone upgrade cycle, however, and Apple is highly dependent on the iPhone for its profit, so at some point soon I will probably trim my "overweight" position and go back to "equal weight." This is to say, I will soon own Apple the way I own most stocks—via index funds.

Sept. 22 2014 9:39 AM

Adrian Peterson Has a Terrible Contract, and Cutting Him Would Save the Vikings a Lot of Money

This article originally appeared in Business Insider.

The Minnesota Vikings reversed course last week and decided Wednesday to bar Adrian Peterson from the team until his legal issues are resolved. The Vikings put him on the exempt/commissioner's permission list — which will keep him under contract while barring him from team activities. It's basically a paid suspension.

According to Ian Rapoport of NFL Network, Peterson will still earn the $11.75 million he is owed this season. In a statement announcing the decision, the Vikings said he would be away from the team "until the legal proceedings are resolved."

Even if you ignore the public-relations problems that would come with keeping Peterson on the team, the Vikings could save a ton of money by releasing him. Peterson is three years into a six-year, $96 million contract extension. However, the Vikings have already paid out the $36 million in guaranteed money that the contract contained, according to Spotrac. That means they can cut Peterson without paying him a dime of the ~$56 million he is owed between now and 2017. The only financial penalty of cutting him would be a small cap hit ($2.7 million this year and $2.4 million in 2015, Spotrac reports).

Because Peterson's contract is non-guaranteed from here on, the Vikings have no real incentive to keep him. Even before the allegations of child abuse, Peterson's contract was a knock against him. He's the 12th-highest-paid player in the NFL this year. In a time when running backs are less important than ever before, Peterson is getting paid like one of the league's most important players.

Grantland's Bill Barnwell had Peterson as only the 42nd-most valuable asset in the NFL this summer because his contract was so massive. Barnwell said that giving 11% of your salary cap money to a running back is nuts, no matter who he is:

Your typically good Adrian Peterson season is 15 games, 300 carries, 1,400 rushing yards, and 12 touchdowns. That comes with a cap hit, in 2014, of $14.4 million. No other back in football is above $10 million, and the median starting running back has a cap hit of somewhere around $3.4 million. That’s $11 million you can’t put toward an offensive line or a secondary or, yes, a quarterback. If you know you’re going to get a 2,000-yard season out of Peterson like you did in 2012, you would happily pay that extra $11 million. But you’re more likely to get the typical Adrian Peterson season, like 2013’s 279-1,266-10 line, which isn’t far off from what somebody like Alfred Morris can do for $500,000. Every team would love to have Peterson. Very few want to commit nearly 11 percent of its salary cap to a running back, even one as good as Peterson.

Peterson's cap hit is $15 million for each of the next three seasons. That's a huge financial commitment even if he's is playing at a high level. It's a crippling financial commitment if he's not even on the field.

ESPN’s Chris Mortensen reports that the Vikings “do not foresee Peterson in their future.” That contradicts earlier reporting from ESPN’s Adam Schefter, who said that the team still intended to keep the running back. If the Vikings do keep Peterson on their roster, they're gambling on his resolving his legal issues, avoiding a lengthy suspension from the NFL, and returning to his superhuman form from 2012.

Sept. 20 2014 6:30 AM

The Man Making Bill Gates Richer

This article originally appeared in Business Insider.

Bill Gates is worth an astounding $81.6 billion and he keeps getting richer every year. His secret weapon is a man you have probably never heard of: Michael Larson.  Gates hired Larson 20 years ago, when his net worth was a relatively paltry $5 billion, Anupreeta Das and Craig Karmin report in a profile on the notoriously secretive Larson at the Wall Street Journal.  Larson runs Gates' personal investment company Cascade Investment LLC, funded solely by Gates.

At one time, Gates wealth depended solely on Microsoft. But for years he's been selling off his Microsoft stake. The common perception is that he's been using the proceeds from those sales directly for charity. That's not entirely how it works.  Although Gates makes his own investments in tech, it is Larson, though Cascade, who has taken Gate's money and diversified it. Gates now has vast holdings in real estate and non-tech companies like the Canadian National Railway Co., AutoNation Inc., and Republic Services Inc. It is these vast holdings that helps fund the Gates' donations.

And although Gates has given an astounding $38 billion to his charitable foundation, thanks to Larson, he's getting richer faster than he give his money away. His $81.6 billion is nearly $6 billion more than it was as of March 2014, when he was worth $76 billion, we reported at the time. And $76 billion was $9 billion more than he was worth in March, 2013.

In February, Gates celebrated 20 years of this partnership by throwing a gala to honor Larson at his Seattle mansion, reports the WSJ. It was a rare occasion where the two men socialized with each other. Apparently, they aren't buddies and don't hang out much, sources told the Journal.

At the party, Gates told guests that he has "complete trust and faith" in Larson, meaning that Larson invests Gates' money, buying and selling, with completely autonomy.

And he does it all under a cover of such ferocious secrecy that he's been nicknamed "the Gateskeeper."

Although publicly traded companies do reveal when Cascade has invested heavily in them, Larson has all sorts of tricks for keeping Cascade and Bill Gates' name out of other investments, sources told the Journal.

For instance, he makes employees sign confidentiality agreements which cover them even after they leave. He farms out more than $10 billion to up to 25 outside money managers. This helps him find new investment ideas, but it also helps cover the trail. When Cascade was part of an investment group that bought the Ritz-Carlton hotel in San Francisco, the publicist didn't even know Cascade, and Bill Gates, was among them.

He's also been known to fire up a limited Limited Liability Corporation to make real estate purchases, to keep Cascade's name off the deal and the deed.

He's so good at hiding the trail that most people don't know that Gates, through Cascade, owns a significant stake in the Four Seasons luxury-hotel chain.

And he's frugal with the boss's money, too. Apparently Cascade employees, of which there are about 100, are not allowed to stay at the Four Seasons when traveling on business, even if that business is on behalf of the Four Seasons.  They must choose a lower-cost, less luxurious hotel.

"Melinda and I are free to pursue our vision of a healthier and better-educated world because of what Michael has done," Gates told guests at the party.

And ultimately, the money will go to charity. Bill and Melinda Gates have vowed to donate 95 percent of their wealth to their foundation, as part of Gates' Giving Pledge.

But until then, Larson is making it grow.