The Wall Street Journal: Saturday, August 24, 2013

CEO Exit Sets Microsoft on New Path (page A1): In announcing his sudden retirement Friday after more than three decades at Microsoft Corp., Chief Executive Steve Ballmer will leave his successor with the enormous task of reviving one of the world’s largest technology companies that finds itself beset by competitors on all fronts. Mr. Ballmer, 57 years old, along with his college buddy and Microsoft founder Bill Gates, built the company into a profit machine whose Windows operating system will still power nearly all the 305 million personal computers expected to be sold globally this year, according to research firm Gartner Inc. But it will run just 15% of all computing devices, if PCs, smartphones, tablet computers and other gadgets connected to the Internet are lumped together, given the rise of rivals such as Apple Inc. and Google Inc. Investors cheered the news of Mr. Ballmer’s departure, sending Microsoft shares up 7% to $34.75 on the Nasdaq Stock Market. Microsoft remains a behemoth financially. It generated nearly $78 billion in revenue in the year ended June 30—an average pace of $150,000 worth of sales every minute. The company’s fat profit, amounting to $21.86 billion last year, remains the envy of most industries. Under Mr. Ballmer’s watch, the company succeeded in limiting many threats, including the open software standard called Linux that Mr. Ballmer once described as a “cancer.” He also helped Microsoft recover from the shock of the U.S. government’s effort to break the company apart. But Microsoft generates nearly all of its profit from a trio of products—Windows, Microsoft Office and related software to run companies’ back-end computing gear—that are deeply dependent on the sales of Windows-powered PCs. Other products, such as the Xbox videogame machine and the Bing search engine, are either unprofitable or only marginally so.

The Real Reason College Costs So Much (page A9): Another school year beckons, which means it’s time for President Obama to go on another college retreat. “He loves college tours,” says Ohio University’s Richard Vedder, who directs the Center for College Affordability and Productivity. “Colleges are an escape from reality. Believe me, I’ve lived in one for half a century. It’s like living in Disneyland. They’re these little isolated enclaves of nonreality.” Mr. Vedder, age 72, has taught college economics since 1965 and published papers on the likes of Scandinavian migration, racial disparities in unemployment and tax reform. Over the last decade he’s made himself America’s foremost expert on the economics of higher education, which he distilled in his 2004 book “Going Broke by Degree: Why College Costs Too Much.” His analysis isn’t the same as President Obama’s. College costs have continued to explode despite 50 years of ostensibly benevolent government interventions, according to Mr. Vedder, and the president’s new plan could exacerbate the trend. By Mr. Vedder’s lights, the cost conundrum started with the Higher Education Act of 1965, a Great Society program that created federal scholarships and low-interest loans aimed at making college more accessible. In 1964, federal student aid was a mere $231 million. By 1981, the feds were spending $7 billion on loans alone, an amount that doubled during the 1980s and nearly tripled in each of the following two decades, and is about $105 billion today. Taxpayers now stand behind nearly $1 trillion in student loans. Meanwhile, grants have increased to $49 billion from $6.4 billion in 1981. By expanding eligibility and boosting the maximum Pell Grant by $500 to $5,350, the 2009 stimulus bill accelerated higher ed’s evolution into a middle-class entitlement. Fewer than 2% of Pell Grant recipients came from families making between $60,000 and $80,000 a year in 2007. Now roughly 18% do. This growth in subsidies, Mr. Vedder argues, has fueled rising prices: “It gives every incentive and every opportunity for colleges to raise their fees.”

Enter the Post-Ballmer World (page B1): Microsoft Corp.’s Steve Ballmer tried new operating systems, new gadgets and new management structures. But the times caught up with a man who helped build one of the greatest companies of the 20th century. Mr. Ballmer’s surprise retirement announcement Friday follows years of criticism about the waning growth and stagnant stock price of Microsoft, a force in the personal-computer era whose power was once so great that U.S. regulators sought to break up the company. PC sales—the lifeblood of Microsoft’s business—are on a steady decline. Business and casual users alike are switching to devices and services offered by Apple Inc. and Google Inc. Investors cheered the news, pushing Microsoft shares up 7%, or $2.36, to $34.75, in 4 p.m. trading Friday on the Nasdaq Stock Market. Microsoft’s offerings to customers “are downright confusing,” said Daniel Gasparro, an IT consultant who recently managed Microsoft software purchases for clients including Washington, D.C. law firm Patton Boggs LLP. “When you’re spread too thin, you’re not good at anything.” Mr. Ballmer, who took the reins from Chairman Bill Gates in January 2000, has responded to the changes by recently overhauling the company’s Windows software to be used with touch commands and introducing a Microsoft-designed tablet computer called Surface. More broadly, Mr. Ballmer has attempted in the past year to remake the company’s overarching strategy to become a provider of devices and services rather than emphasizing software sales. A management structure announced in July that abandons autonomous product groups is expected to speed the transition. But the shifts haven’t yet helped reignite the company’s growth, though its longtime businesses continue to produce healthy profits. Its stock hasn’t shown significant gains since the crash following the Internet bubble, which had taken its share price to a high of $58.03.

Inside Comcast’s $30 Billion TV Bet (page B1): Cameras popped as celebrities stepped out of tinted-window vehicles at a Manhattan ballroom where E! cable network was hosting an event for advertisers. Kim Kardashian preened on the red carpet while Ryan Seacrest chatted with fans. But Steve Burke, the CEO of E’s parent, NBCUniversal, was decidedly not in a partying mood. “I want to kill myself,” he said before ducking into an elevator. “They tried to get me to do the red carpet, but I said ‘no’,” he laughed. When the doors opened, a woman asked him to pose for a picture with the Olympian swimmer Ryan Lochte. “You’re a good sport to put up with all of these suits,” he told Mr. Lochte, leaning in for the photo. In the two years since Comcast Corp. bought NBCUniversal, Mr. Burke has shown a zeal for shaking things up with little sentimentality, weeding out some of the company’s most well-known personalities in the process. A straight-talking Harvard Business School graduate, Mr. Burke belongs to a new generation of media chieftains—including Time Warner Inc.’s Jeff Bewkes and Viacom Inc.’s Philippe Dauman—who are more enamored with the bottom line than with Hollywood glamour. He refrains from hanging out in the news rooms and indulging stars—hallmarks of his predecessor Jeff Zucker. Warren Buffett, who made him a director on his board at Berkshire Hathaway, describes him as “a personable guy, but not flamboyant.” Mr. Burke is the man in charge of pulling off a colossal wager. With Comcast’s two-stage, $30 billion deal completed in March, the cable giant is betting that its distribution business, combined with a content company, can create outsize benefits. That logic, of course, runs counter to the trend of big U.S. media companies breaking themselves into smaller pieces. Time Warner Inc. spun off its cable operations in 2009 after failed bids to happily marry its content and distribution arms; Viacom Inc. carved out its CBS broadcast television and radio business into a separate company in 2005. Mr. Burke argues that the Comcast model is different, and that the company he took over from General Electric Co. was “very broken.” “You don’t get a chance to buy a company like NBCUniversal unless it’s not doing well,” he said in his first major interview, sitting in an office notable only for its multiple television screens and many framed family photos. “We started from the premise there is a lot of opportunity here.”

Intern’s Death Scrutinized (page B2): Bank of America Merrill Lynch has appointed a committee of senior officials to investigate the circumstances surrounding the death of a summer intern in London, the bank said. The bank’s statement said the “formal senior working group” would “review all aspects of this tragedy” and “listen to employees at all levels” as more information becomes available. The group at the investment-banking division of Bank of America Corp. will be looking at, among other things, whether its interns and other junior employees are encouraged to work overly long hours or are pushed into unhealthily competitive environments as they vie for a limited number of jobs, said a person familiar with the situation. Moritz Erhardt, who was 21 years old, died on Aug. 15, just before completing his internship with the bank’s investment-banking group. While his cause of death is unknown, it has become a cause célèbre in the U.K., generating widespread media coverage. Like other Bank of America interns, Mr. Erhardt was rotating through the division, working on a variety of projects. Long working hours were the norm, as is often the case at investment banks in London, according to a person familiar with the matter. Interns at investment banks often work between 60 to 80 hours a week, said Scott Rostan, founder of Training the Street Inc., which provides financial-training courses for new Wall Street employees.

Friday’s Markets: Microsoft Helps Pull Stocks Up (page B5): U.S. stocks ended the week on a bright note, as a drop in Treasury yields and a rally in Microsoft helped divert investors’ attention away from recent concerns over Federal Reserve policy. It was an eventful week for stocks, if not an active one in terms of volume. Stocks slumped early in the week, with blue chips experiencing the longest losing streak in over a year and Treasury yields jumping to two-year highs, amid increasing worries that an improving economy would prompt the Fed to start slowing the flow of liquidity by tapering bond purchases as early as September. The market started rebounding on Thursday, as investors shook off technical issues that forced trading halts in all Nasdaq Stock Market-listed for three hours that afternoon. The Dow Jones Industrial Average rose 46.77 points, or 0.3%, to 15010.51 on Friday. The Dow still posted a third-straight weekly loss, the longest such stretch since November 2012. The S&P 500-stock index gained 6.54 points, or 0.4%, at 1663.50, and the Nasdaq Composite Index advanced 19.09 points, or 0.5%, to 3657.79. The S&P 500 and Nasdaq posted weekly gains.

Investors Embark on a European Tour (page B7): Things are starting to come together for the continent that almost fell apart. The economy in the 17-member euro zone is growing again—slowly—after contracting for more than a year. Signs of revival are showing up in data on business activity and consumer confidence. As in the U.S., central bankers’ extraordinary commitment to injecting cheap money into their economies has so far helped avert disaster. The euro zone hasn’t splintered, as some feared, and no country has dropped the common currency. As worries ease, markets are up from Ireland to Italy. Benchmark national indexes in the U.K., France and Germany have climbed at least 10% this year. The pan-European Stoxx Europe 600—akin to the S&P 500 in the U.S.—is up 19% in the 13 months since Mario Draghi said the European Central Bank, which he heads, was “willing to do whatever it takes to preserve the euro.” Investors planning their own grand investing tour of Europe’s stocks should know there still are discounts available. But as many a shopper in the markets of London, Paris or Rome will agree, it can pay to be choosy. For instance, many fund managers see more near-term upside in consumer goods and banks than in European utilities or energy firms. There are several options for investors. Low-cost index funds, such as the Vanguard FTSE Europe exchange-traded fund—which charges 0.12% in fees, or $12 for every $10,000 invested—offer broad exposure that includes many of the region’s global heavyweights. There also are actively managed, Europe-focused funds run by stock pickers who try to beat benchmark indexes, and global funds that feature a hefty dose of European exposure. In addition, many European companies issue American depositary receipts that trade like shares on U.S. exchanges. Some firms only trade on home-country exchanges, which U.S. investors can access through brokers or international accounts, though this typically involves taking on currency risk and navigating complicated tax rules.

Lofty Profit Margins Hint at Pain to Come for U.S. Shares (page B7): Profit margins at near-record levels—watch out below! If you are wondering what might prove to be the stock market’s Achilles’ heel, look no further than its dependency on near-record corporate profit margins. Any sizable decline would almost certainly translate into big losses for the stock market. Given the current high levels, such a retreat seems likely. Investors therefore may want to begin building up a healthy cash position to take advantage of lower prices in coming years. U.S. corporations, on average, currently report a profit of 9.3 cents for every dollar of sales, according to U.S. Commerce Department data—a profit margin of 9.3%. It has gotten only slightly higher than this over the past six decades: In the fourth quarter of 2011, it was 10%. The average since 1952 is 5.9%. Profit margins in the past have exhibited a strong historical tendency to “revert to the mean,” according to James Montier, a visiting fellow at the U.K.’s University of Durham and a member of the asset-allocation team at Boston-based GMO, an investment firm with $108 billion under management. That is, above-average levels in the past have tended to quickly fall, just as below-average levels in the past have soon risen. Consider all occasions since the early 1950s in which the profit margin rose to at least 6.9% or fell to at least 4.9%—one percentage point away from its historical mean, in other words. On average, it was back at its mean in just 4.8 years.

Microsoft: Hitting Ballmer Out of the Park (page B14): Merely by announcing his retirement, Steve Ballmer can more than pay for it. Shares in Microsoft leapt more than 7% Friday when the software giant announced its chief executive will retire within 12 months. Owning 333 million shares of Microsoft, Mr. Ballmer’s personal net worth increased by about $800 million on the news. Microsoft needs a change in leadership. This is a company that, after establishing its dominance in the personal-computing market 30 years ago, whiffed badly on two of the next three computing megatrends: the Internet and mobile. Former CEO Bill Gates deserves blame for missing the Internet. Blowing it in mobile is Mr. Ballmer’s error, having taken the reins in 2000. And that is arguably more dangerous to Microsoft’s long-term financial outlook, because one of the company’s largest businesses is writing software that powers computers, most successfully in PCs and servers.

Tell Harvard What You Think (page C3): This spring, with little fanfare, the folks behind the Common Application—the main application form for almost 500 of the nation’s top colleges and universities—announced a big change: the personal statement, the form’s core essay, has been extended from 500 to 650 words long. I thought: That’ll be $13,000. Several years ago, on a high floor in a midtown Manhattan office, a father offered me $10,000 to write his son’s personal statement. Apparently he had misunderstood what was meant by “independent college applications adviser.” The publishing industry may be in a tailspin, but in some places, writers can still earn $20 a word. Thanks to the Common Application’s changes (and not including inflation), that’s $13,000 a kid. Though I had other “day jobs,” for 15 years I worked discreetly as a college-applications adviser in cities from Los Angeles to London. I never wrote a student’s essay, but I was practicing a dark art: such tutoring privileges the elite whose parents can afford it and profits from a miserable process. The grim statistics of the college admissions race (last year Harvard reported a 5.79% acceptance rate), fueled by an obsession with trophy schools, have warped what might be a powerful threshold for adolescents. At the very moment when teenagers are invited to offer what they’ve learned and who they’ve become, their voices are hijacked by well-meaning adults who think kids can’t possibly be allowed to risk answering these questions on their own. In my years handling applications to elite schools, from Harvard to Haverford, Davidson to Dickinson and everything in between, I was often surprised by where students did gain acceptance. But in every case it was a student who wrote a fabulously independent essay. Not necessarily hyper-sophisticated. But true. My students always asked me, What should I write about? I’d answer: You are a student of the world. What is it that moves you? What incites you, enrages you? The first-person pronoun is a mighty tool. Use it.

Weekend Confidential: An Interview with Edward Frenkel (page C11): The words love and math aren’t usually uttered in the same breath. But mathematician Edward Frenkel is on a mission to change that, uniting the terms in both his recent film, “The Rites of Love and Math,” and upcoming book, “Love and Math.” Both are attempts to bridge the gap between his passion for math and the popular appetite for it. “You say the word ‘math’ and people shut down,” says Mr. Frenkel, sitting outdoors in New York’s Bryant Park. In his book, to be published in October, the tenured professor at the University of California at Berkeley argues that the boring way that math is traditionally taught in schools has led to a widespread ignorance that may have even been responsible for the recession. “It’s like teaching an art class where they only tell you how to paint a fence but they never show you Picasso,” he says of elementary school math classes. “People say, ‘I’m bad at math,’ but what they’re really saying is ‘I was bad at painting the fence.’ ” Love is a different story, though. “People might think they hate math but everyone loves love,” he says. “I want to put more love into math.” And Mr. Frenkel, a youthful, puckish 45-year-old with a slight Russian accent and a flair for fitted shirts and tailored jeans, hopes to be math’s next leading man. With YouTube videos of his lectures at UC Berkeley viewed by hundreds of thousands of people—”and that’s even the most boring stuff,” he adds—Mr. Frenkel does indeed talk about math adoringly. “It is this great connector,” he says. “Nobody can take it away from us.” What he means is that while the philosopher Pythagoras lived over 2,000 years ago, his theorem still exists today; it holds true across cultures, time and space. “How many things have the same endurance?” he asks. Mathematical formulas “have a quality of inevitability.”

Suites Get Even Sweeter (page D1): Over the past few years, the world’s fanciest hotels have been introducing a new generation of incredibly posh suites. These signatures spaces have eye-widening views and couture furnishings, and they are immense—in many instances, bigger than the average American home, which is about 2,200 square feet, according to the U.S. Census. In tourist magnets like New York, Paris, London and Dubai, the suites can be priced at tens of thousands of dollars a night. “These are for people who don’t pay their own bills,” said Steven Carvell, associate dean for academic affairs at the Cornell University School of Hotel Administration. “They have people who pay their bills for them.” Some of these super-suites are the crowning glories of new, haute hotels hoping to make a splash; others are being carved out of existing space by properties seeking to raise their profiles in the luxury market. And plenty are remakes of older suites that had faded and grown dated over the years.

Juicing, A to Z (page D7): “A juice bar on every corner” could be the unofficial slogan of the Obama era. In New York, the trend hit critical mass in the last year or so, but long before that, there was Melvin Major, Jr. “When I got into juicing 23, 24 years ago, it was kale, collards, chard,” he said of the prevailing circa-1990 approach. “I couldn’t do all-green—it was too hard-core. I wanted a great taste.” Today, at Melvin’s Juice Box in SoHo, Mr. Major serves the Jamaican Green, a lively kale, apple, lemon, ginger and celery blend with terrific body and a mineral finish. To describe a juice in this way—as one might a wine—is beginning to make sense now that more chefs are getting into the game. At long last, juice is having its epicurean moment. The new wave runs to refined combinations like beet, blood orange, fennel and shiso leaf—aka the Zest for Life, at Creative Juice in New York. (The juice’s creator, chef Michael Romano, said, “I’d serve it with a meal, something like roasted venison.”) Or elegantly spare sips like a honeydew, cilantro and lime mix at Moon Juice in Venice, Calif. Owner Amanda Chantal Bacon, a veteran of top restaurant kitchens, said, “I didn’t want to distract from the honeydew. The lime just polishes it a bit.” Up the beach in Santa Monica, Matthew Kenney of the acclaimed raw-vegan restaurant M.A.K.E. spikes his citrusy Spice-C with jalapeño. “You’re getting superpowered nutrition; you should feel it,” he said. “It’s a dynamic mouth experience.” Mixologists are expanding the repertoire of ingredients still further. In Portland, Ore., Lydia Reissmueller of TenderBAR is in the process of launching her own juice company. Her Succotash Smash of squash, tomato and sweet pepper gets its exotic herbal note from Mexican epazote. Among serious home juicers, cold-pressing—a slow process said to extract a more nutrient-rich juice—is the prevailing orthodoxy. But for those just starting out, Matt Shook of JuiceLand in Austin, Texas, recommends the easy-to-use Breville Juice Fountain (models start at $100), a centrifugal machine that pulverizes produce and spins to separate juice and pulp. The 26 fruits, vegetables, herbs and spices featured here are another great place to start. Use them in the recipes below, or just go with whatever tastes good to you. Delicious is the new hard-core.

2013_08_24_cmyk_NA_04To Tokyo with Gadget Love (page D11): Rest and relaxation in Waikiki. A boys’ night out in Vegas. Gadget shopping in Tokyo. Most guys might choose the first two escapes, but I’ve been going to Tokyo every year for the past decade to seek out the newest gizmos—products that haven’t yet made it to the west or are simply too niche to ever be imported. In my travels, I’ve found tiny wooden speakers hand-carved out of rare Japanese cedar, silicone keyboards that roll up like a burrito and a Gameboy cartridge filled with 500 games that were never released stateside. Some of the gadgets are brilliant solutions to urgent nerd problems; others will leave you dumbfounded. Don’t let the sillier products deter you, though. For every bewildering gadget you’ll find, a dozen more will be worth taking home. And, luckily for tech-obsessed tourists, getting around is easy: Most of the key stops are in the Akihabara neighborhood, on the Japan Railway’s Yamanote line. Here are five of my favorite spots, as well as a few of the curios that I found on my latest trip. While you can buy some of these products online, there’s no substitute for making an actual pilgrimage.

Don’t Let the Tech out of the Bag (page D12): Two bags keep your iPad, iPhone and other essential gear at the ready, here are two backbacks: the Osprey Pixel Port and Cocoon SLIM.

 

The Wall Street Journal: Friday, August 23, 2013

Nasdaq in Fresh Market Failure (page A1): A technical glitch knocked out trading in all Nasdaq Stock Market securities for three hours Thursday afternoon, an unprecedented meltdown for a U.S. exchange that paralyzed a broad swath of markets and highlighted the fragility of the financial world’s electronic backbone. Nasdaq officials scrambled to figure out what happened and resume trading. They shared few of their findings with trading firms or the public during regular trading hours, sowing confusion across Wall Street and leaving many investors frustrated. The decision to reopen trading with about 35 minutes to go before the close came after exchange officials were sure that banks and brokers had enough time to prepare for securities to trade again, people familiar with the discussions said. Some hiccups persisted after Nasdaq reopened trading, though Nasdaq told traders that the markets closed normally Thursday.

Obama Proposes Rating Colleges to Curb Tuition Costs (page A2): Calling growing student debt levels a “crisis,” President Barack Obama laid out a plan Thursday aimed at reining in rising tuition costs by creating a system to rate colleges and eventually tie federal student aid to the institutions’ performance. The president called for rating colleges before the 2015 school year on measures such as affordability and graduation rates—”metrics like how much debt does the average student leave with, how easy is it to pay off, how many students graduate on time, how well do those graduates do in the workforce,” Mr. Obama told a crowd at the University at Buffalo, the first stop on a two-day bus tour. “The answers will help parents and students figure out how much value a college truly offers,” he said. Once a rating system is in place, Mr. Obama will ask Congress to allocate federal financial aid based on the scores by 2018. Students at top-performing colleges could receive larger federal grants and more affordable student loans. “It is time to stop subsidizing schools that are not producing good results,” he said.

Purchases or Promises: What Works for Fed? (page A2):  Federal Reserve officials gathering in Jackson Hole, Wyo., this week with academics, private bank economists and others will ponder a question that will influence Fed decisions in the coming months: Which of its novel monetary tools are doing the most for the economy? Is it the huge purchases of long-term Treasury bonds and mortgages, now known as “quantitative easing?” Or is it the promise to keep short-term interest rates low for a long time? The Fed is considering scaling back the first, while sticking firmly to the second. The first—the $85 billion a month in bonds it has been buying—uses the power of the Fed’s printing press. The other relies on the power of the Fed’s words. Both are aimed at holding down long-term rates, the ones that home buyers and corporations pay, and, thus, encouraging borrowing, spending and investing. Views vary widely about which works better, a disagreement that is complicating the Fed’s decision-making.

Inside a Secret Airline Club (page B1): For years, upmarket carriers including British Airways, Deutsche Lufthansa AG and Qatar Airways have used exclusive programs, lounges and perks to reward their best customers. In the U.S., United and AMR Corp.’s American Airlines have recently tried to catch up, offering unpublicized programs that afford sometimes extravagant service to those fliers incessantly at airports, like George Clooney’s character in the movie “Up in the Air,” who pursues a dream of reaching 10 million frequent-flier miles. The airlines employ teams to track these fliers’ journeys and solve disruptions before they happen, sometimes bumping coach passengers to fit rerouted elite travelers. The carriers invite these customers to expensive restaurants and professional sporting events when they aren’t traveling. At the airport, they send their mail, press their suits and sew on buttons. United said that when an elite flier once stained his shirt, an employee sent her husband to the mall to buy a replacement.

Teen Retailers Left Hanging (page B3): Abercrombie & Fitch Co.’s stock tumbled Thursday after the teen retailer said profit fell 33% on a sharp drop in sales and indicated it would continue to struggle through the current quarter. Abercrombie’s troubles stem from weaker traffic and a drop in U.S. sales, which also have been weighing on rival teen retailers American Eagle Outfitters Inc. and Aéropostale Inc. But unlike those companies, Abercrombie gave no warning to Wall Street of the expected difficulties, making Thursday’s results a surprise. Mike Jeffries, Abercrombie’s chief executive, said teens are still struggling with an economic recovery that has failed to fully include them.

Gap Avoids Retail Slump, Posts Profit Rise (page B3): Gap Inc.’s fiscal-second-quarter profit rose 25% on higher sales at the apparel retailer’s namesake and Old Navy stores, prompting the company to raise its full-year earnings outlook. The retailer has reported higher same-store sales for six consecutive quarters, bolstered by an improving product line that has tapped some hot fashion trends, including a line of colored jeans last year that were well received. Gap is facing rising competition from fast-fashion players such as Forever21 and Inditex Group Inc.’s Zara, but has managed to outperform other mall-based retailers, including Macy’s Inc. and American Eagle Outfitters Inc.

Chinese Consumers Take a Step Back, Pinching Firms (page B3): Companies as diverse as retailers and gadget makers are reporting weakened results from China, as the economic slowdown there blunts Beijing’s drive to make the nation’s consumers a bigger driver of growth. Last month, Canon Inc. cut the Japanese company’s year-end profit forecast to ¥380 billion ($3.89 billion), off 16% from forecasts three months earlier, citing in part the slowdown in China. Nike Inc. reported falling China sales in its latest results, while British supermarket chain Tesco PLC is in talks with a local company, China Resources Enterprise Ltd., about folding its 131 underperforming Chinese stores into a joint venture. Apple Inc. said last month that its revenue from the greater China region fell 14% from a year earlier to $4.6 billion for the quarter ended June 29. The figure represents a 43% decline from the previous quarter. “A lot of the China story that companies would tell their shareholders was always about 15% nominal growth in gross domestic product, 20% increases in sales,” said Derek Scissors, an expert on China’s economy at the Heritage Foundation, a Washington, D.C., think tank. “That overarching growth story has weakened.” Many are blaming China’s economic slowdown for at least part of their performance. Growth slowed to 7.5% year-to-year in the second quarter, compared with 7.7% in the first.

Wal-Mart to Grow in Sub-Saharan Africa (page B4): Wal-Mart Stores Inc.’s South African arm plans to open 90 new stores across sub-Saharan Africa over the next three years as it targets growth markets such as Nigeria and Angola. Massmart Holdings Ltd. said it will open a trial stand-alone food store in West Africa by the end of the year, in hopes of expanding to East Africa. It said it is also adding more brands from Wal-Mart stores in other parts of the world to its Africa operations, including a clothing line from the U.K. in November. Wal-Mart last year closed a deal valued at roughly $2.4 billion to buy 51% of the South African retailer, a move many industry watchers viewed as a springboard for Wal-Mart to grow across the continent. Over the coming three to five years, Massmart will open more stores in the rest of Africa, Grant Pattison, its chief executive, said Thursday. Wal-Mart and Massmart aren’t the only companies setting their sights on Africa. Companies from the U.S., China and India have poured billions of dollars into the continent, investing both in its emerging consumers market and in infrastructure deals, amid forecasts for strong growth in the region. By 2018, five of the world’s fastest-growing economies will be in sub-Saharan Africa, according to the International Monetary Fund.

Thursday’s Markets: Stocks Record a Gain (page C4): U.S. stocks rose, with blue chips snapping the longest losing streak in over a year, as investors shook off trading halts in all securities listed on the Nasdaq Stock Market due to technical issues that affected the major market indexes for most of the afternoon. Nasdaq parent Nasdaq OMX Group announced the halts at 12:15 p.m. EDT. Notices sent to traders said the technical issues were related to data feeds providing market data for Nasdaq-listed securities. One stock, Atlantic American, began trading at 3 p.m. EDT, while full trading resumed at 3:25 p.m. Nasdaq OMX shares fell 3.5%. During the halt, the Nasdaq Composite Index remained frozen at 3631.17, up 31.38, or 0.9%. The Dow Jones Industrial Average traded within a range of about 14927 to 14968, while the S&P 500-stock index held roughly within 1652 to 1656. The halts also affected the calculation of the Dow, which include Nasdaq stocks Microsoft, Cisco Systems, and Intel, and the S&P 500. The Nasdaq rose 38.92 points, or 1.1%, to 3638.71. The index added to gains after the halts were lifted. The Dow rose 66.19 points, or 0.4%, to 14963.74. It was the first gain for the blue chip index in seven sessions. The S&P 500 advanced 14.16 points, or 0.9%, to 1656.96.

Fed Seeks More Control Over Rates (page C4): A plan that has been under consideration by the Federal Reserve to borrow money from investors at fixed interest rates shows how the central bank is preparing for an eventual exit from its ultra-easy monetary policies. In the July minutes of the Fed meeting released Wednesday, officials discussed a proposal to introduce a so-called reverse repurchase program, which would let the Fed set an interest rate on securities it would sell at auctions as part of its open-market operations. Banks and other investors would then decide how much to buy. This is a departure from current procedures, in which the Fed announces the amount of government bonds it intends to buy or sell in these operations and lets the market set the rate. While this appears to be a small tweak to the Fed’s practices, the implications could be wide-ranging if the plan is adopted. Contrary to popular belief, the Fed doesn’t set outright the interest rate that banks charge each other for overnight funding. Instead, it seeks to influence the effective federal-funds rate—a widely watched benchmark—by these open-market operations, which are conducted at the New York Fed. The Fed has been planning tools to eventually exit from its easy money policies for several years. This essentially adds a new tool to its kit. The Fed wants to be sure it can control short-term interest rates and lift them from near zero when the time comes. Talk of the plan comes as financial markets are anticipating the Fed will begin reducing the extraordinary support it has provided in the form of bond purchases, known as quantitative easing.

A Breakout Band Waits to Take Off (page D4): “This is amazing! Gives me chills!” Actor and musician Kevin Bacon tweeted that message last October to hundreds of thousands of followers, along with a link to a music video by an unknown Boston band. Sung in a smoky alto by Rachael Price, Lake Street Dive’s jazzy acoustic cover of the Jackson 5’s “I Want You Back” has had more than 900,000 views since Mr. Bacon’s tweet. Produced on a shoe string—it was filmed by a friend on the street in front of his Boston home when the local bowling alley where they had planned to shoot wasn’t available—the video created an instant following for a band that has been championed by influential radio stations like New York City’s listener-supported WFUV, but ignored by mainstream radio. “When I first heard them,” says WFUV program director Rita Houston, “I immediately became an evangelist. I wanted to tell everybody. I wanted my mom to know about them.”

A Hipster Goes for Baroque (page D4): Chris Thile has never been shy about genre-hopping. In his early 20s, singing and playing with the band Nickel Creek, the mandolin virtuoso covered songs by slacker-rock heroes Pavement, picking along with a fiddler and a guitarist. And a year ago, he was onstage with his band at Bonnaroo, the Tennessee summer music festival, working the crowd with acoustic string-band covers of rock songs by The Cars, Radiohead and others. Now, he’s trying to get the same fans just as excited about classical music. For his latest record, “Bach: Sonatas and Partitas Vol. 1,” Mr. Thile, 32, has taken an approach of unadorned simplicity: It is just him, alone in a room with his mandolin, playing three suites—16 tracks in all—of works written for solo violin by Johann Sebastian Bach, the master composer of late-Baroque church music. Mr. Thile argues that the same crowds that headbang to Radiohead anthems should be just as able to get psyched for Bach or Mahler. “The great musics of the world are great for very similar structural reasons: good melody, good harmony, and a balance of feminine and masculine energy. What makes one type of music classical and one bluegrass and one folk—these things aren’t what’s important,” he said at a recent interview in midtown Manhattan. “My thesis statement would be—Bach didn’t write Baroque music. He wrote great music.” At times, Mr. Thile’s new record has the same technical “wow factor” as his work with his band, Punch Brothers. On the “Presto” from Bach’s Sonata No. 1 in G minor, for example, Mr. Thile’s fingers trace Bach’s elegant melody lines and near-nonstop arpeggios at an off-to-the-races tempo, up and down the neck of his instrument—not unlike a bluegrass fiddle tune. At other points, such as the “Allemanda” from the Partita No. 1 in B minor, Mr. Thile plays in a purely Baroque vernacular, shedding any trace of bluegrass and making his mandolin sound stately and delicate, not unlike the lutes played by Bach’s Renaissance forebears.

Running Out of Chances to Lose to Roger (page D7): For years, Roger Federer has been the most popular attraction at the U.S. Open. He has played 58 matches in Arthur Ashe Stadium, more than any other male player, and once won this tournament five years in a row. As he ages, though, his fellow pros are getting a bit nervous. “I am scared he will leave tennis and I don’t have the chance to play against him,” said Lorenzo Giustino, a 21-year-old Italian, at a small tournament in San Marino earlier this month. Giustino, ranked No. 302, didn’t qualify for the U.S. Open. “He’s a big guy,” said Illya Marchenko, a 25-year-old from the Ukraine, after his first qualifying match at the U.S. Open on Tuesday. “He was No. 1 for the longest period of time, and for me he’s the No. 1 still, even if he’s not now.” In a sport that has no shortage of legends, Federer is perhaps the most coveted opponent in history. It isn’t difficult to understand why. He has won 17 Grand Slam singles titles, more than any man who has ever played the game. His strokes have an elegance and ease that make even fellow pros marvel. He also plays at a brisk pace and doesn’t throw temper tantrums or intimidate opponents with scowls or trash talk. At worst, he might embarrass them. “That one,” Thomas Schoorel said as he recalled Federer hitting the ball between his legs for a winner when they played in Dubai in 2011, “when it landed in, I had to laugh. But I also felt pretty s—.”

Your House Is Ready for Its Closeup (page M1): Mini-movies and Hollywood-style trailers complete with scripts, musical scores and even action sequences are cropping up as a new way to pitch pricey homes and condominium buildings. According to the National Association of Realtors, 14% of sellers used video to help sell their homes in 2012, up from 9% five years ago. Mr. Hahn, director and CEO of Film House, said he shot his first real-estate mini-movie in September of last year. He has since shot nearly 10, doing about one a week since June. Real-estate agents and developers who commission the films say that perfectly lighted rooms and aspirational story lines help grab buyers, and are the next extension of a home-buying experience that has increasingly gone online. Budgets for such films are often a percentage of the home’s listing price, and can range from a couple thousand dollars to $1 million or more for large-scale productions marketing condo buildings. The cost is paid either by the listing agents or sellers, and sometimes split between them.

Cold Cash: The Effect of AC on Home Prices (page M5): Even in the winter, the air conditioner is working hard—boosting a home’s value. An analysis of property listings in 22 major metro areas found that homes with central air conditioning are offered for 13% more, on average, than homes without central air, according to real-estate brokerage Redfin. Cities in the Midwest see the widest price gap: Homes with central air are listed for 105% more than homes without central air. Of course, homes with central air may have other amenities that help bump up the list price. But AC seems to be a driving force in the decision making, according to the National Association of Realtors, a trade group. In a survey of recent home buyers released in November, central air was the No. 1 feature sought when house shopping, according to the survey of 2,005 respondents who bought a home between 2010 and 2012. Respondents who purchased a home without central AC would be willing to pay $2,520 more for a home with this feature.

 

The Wall Street Journal: Thursday, August 22, 2013

To Athlete on Sore Knees, Age Is but a Number (page A1): To prepare for this summer’s Senior Olympics, Jim Kales used the following training regimen: He went dancing three to five nights a week. He played tennis six days a week. He bowled a little. He tooled around southwest Florida in a champagne-colored Lincoln MKZ. He didn’t practice at all for the shot put, javelin, discus, long jump or his specialty, the triple jump, in which he holds the record for his age group. Mr. Kales isn’t your typical athlete. For starters, he will be 99 years old in September. “People ask me, ‘What is the secret of your longevity?’ ” says Mr. Kales, who took up tennis in his 80s and has competed in the Senior Olympics since he was 90. “I like to play tennis, I like to dance, I bowl and I don’t abuse myself. I eat a lot of seafood. I have a glass of wine with my dinner, red mostly, white with fish.” He did all right this year in the Olympics, bringing home two gold medals, three silvers and a bronze. He is still annoyed that he didn’t win a medal in discus. A retired restaurant owner from Michigan, Mr. Kales didn’t take up sports or dancing seriously until his wife died, when he was 85. His tennis buddies told him about the Senior Olympics (known officially as the National Senior Games). He qualified at state-level matches and discovered that the Games also included field sports, which he hadn’t tried since he was a child in Greece, where he was born. He eventually qualified in those sports, too.

Fed Stays Course on Bond Buying (page A1): Federal Reserve officials reaffirmed their plan to try winding down an easy-money program that has charged up global markets but left investors on tenterhooks about when or how aggressively they would move. Minutes of the Fed’s July 30-31 policy meeting, released Wednesday, suggested officials were on track to start winding down the $85 billion-a-month bond-buying program, possibly as early as September, if the economy strengthens as they expect. They were, however, a bit more uncertain than in June about whether economic growth would pick up as they forecast and about the gains they were seeing in the job market. The Fed’s deliberations—and its sometimes confusing efforts to publicly signal how officials are thinking—have roiled global markets in the past few months, pushing up U.S. interest rates and knocking down emerging markets, which initially benefited from the Fed’s easy-money policies. Wednesday’s market movements mirrored the broader turmoil and investor confusion. U.S. stocks initially dropped after the minutes were released at 2 p.m. New York time, then moved higher and tumbled again as investors tried to make sense of the report.

Obama Is Taking on College Costs Again (page A2): Barack Obama is testing an interesting proposition: Can the U.S. president cajole or shame a huge American industry into changing its ways? Mr. Obama embarks Thursday on a bus tour of schools in upstate New York and Pennsylvania to highlight what he calls “a personal mission to make higher education more affordable.” Higher ed is one of his preoccupations. He talked about it in the State of the Union address. He talked about it at Knox College when he set out his latest bolster-the-middle-class agenda. He doesn’t think taxpayers can keep pumping more money into student aid to chase (and possibly fuel) tuition tabs rising faster than almost anything besides health care. After all, the number of undergraduates getting federal grants, loans or tax breaks already has doubled over the past decade; the taxpayers’ tab has tripled, adjusted for inflation. Something has to give. This quest is a political winner with nearly everyone except the president’s fans among liberal college professors. In a Pew Research Center poll last year, 57% of Americans said colleges fail to provide students with good value for the money. But the rising cost of college is more than a politically appealing talking point. It’s a threat to widely shared prosperity. Rising tuition threatens to discourage all but the best-off from going to and finishing college, restraining future economic growth and widening the gap between winners and losers in the U.S. economy. The College Board says that over the past 20 years, the inflation-adjusted average published cost of tuition and fees at a four-year state university has more than doubled. Factor in scholarships and tax breaks, and it’s still up more than 50%. Over the same period, the income of the typical family in the middle of the middle class has risen only 7%. That’s one reason student borrowing is up so much. Tuition is climbing because there have been so few constraints. There’s strong demand for seats in U.S. college classrooms, both from the U.S. and abroad. College is still a smart investment that pays off in higher wages. And it’s a whole lot harder (though not impossible) to improve productivity in a college than in a car factory.

Antipsychotic Drugs, Kids’ Diabetes Linked (page A3): The use of antipsychotic drugs appears to increase the risk of diabetes in children, not just adults, according to new research published Wednesday. And kids seem to be at an even higher risk, the study found. A number of studies have concluded that adults who take these medications, including risperidone, also known as Risperdal, and olanzapine, also called Zyprexa, have an elevated risk of developing Type 2 diabetes. Less is known about the link between these drugs and diabetes in children. Studies of other psychiatric medicines, such as antidepressants, have found that kids can have different reactions to the same drugs than adults. The use of antipsychotics in children has grown tremendously. A 2009 study by the U.S. Food and Drug Administration found such use rose 65% to 4.8 million prescriptions in 2009 from 2.9 million in 2002.

An Exit Strategy for Bad Teachers (page A15): Age and experience have much to recommend them over youth and enthusiasm but the advantages don’t always show up in teaching. That’s the finding of a new study, “Early Retirement Incentives and Student Achievement,” published by the National Bureau of Economic Research. According to Cornell University economists Maria Fitzpatrick and Michael Lovenheim, when young, inexperienced teachers replaced older, more experienced faculty in Illinois, the newcomers did as well or better at getting students to learn. The study doesn’t discount the value of seasoned, motivated teachers. It does indicate that teachers going through the motions to qualify for a pension can be a drag on student achievement. The study is more evidence that students do better when teachers are graded on performance, not seniority.

The Battle for the Organic Shopper (page B1): Whole Foods Market Inc. wants to shed its “whole paycheck” reputation. The upscale grocer, known for its pricey organic products, is increasingly emulating the discount tactics used by traditional supermarkets. It is also moving beyond the realm of grass-fed beef with more lower-priced items like frozen meatballs and vacuum-packed fish fillets. The new strategy comes as Whole Foods fends off a growing swarm of rivals competing for customers who have become more careful with their pocketbooks. “The recession was a wake-up call for us,” said co-Chief Executive Walter Robb in an interview. One of the chain’s latest initiatives: nationwide “flash” sales on specific items promoted on Twitter and Facebook that run for just a few hours, like a five-hour buy-one-get-one-free deal on ice cream last month. The chain also is increasing one-day sales on items like salmon, blueberries and organic chicken to 17 this fiscal year, from 14 last year. Whole Foods long avoided such supermarket tactics, thriving instead on a pricey mix of products that appealed to clientele in upscale neighborhoods of large cities where most of its approximately 350 stores are located. High prices on everything from meat to vegetables led critics to quip that shopping at Whole Foods would eat up a middle class earner’s whole paycheck.

wholefoods

Tesla Amps Its Crash Score (page B3): Tesla Motors Inc. has created its own vehicle-safety ranking based on federal crash-test data to amplify a claim that its Model S electric car is the safest car ever tested by U.S. regulators. Tesla, in a statement widely reported this week, said its car “achieved a new combined record of 5.4-stars” in federal crash tests. Tesla noted that the National Highway Traffic Safety Administration, which conducts the government’s auto-crash tests, doesn’t use a rating above five stars.

Inventing for the Future (page B6): Even with an exceptional idea, budding entrepreneurs can struggle to move past the brainstorming stages. They face challenges in execution like building a cohesive team, coming up with a business plan and even understanding how to present their product or service. This week mentors on “WSJ Startup of the Year,” a documentary on wsj.com, offered some words of inspiration for all entrepreneurs. Here’s what some science and technology innovators had to say. Edited excerpts:

Nordstrom Tests an App to Identify Customers page (B7): Nordstrom Inc. is testing mobile technology that sends salespeople the digital profiles of customers as they enter a brick-and-mortar store, said James Nordstrom, president of the company’s online division. “The concept is that a customer would opt-in and download an application because ‘I want the sales person to know I’m here, and I want the salesperson to know my preferences because it will lead to a better experience,’ ” Mr. Nordstrom said. Another recent Nordstrom in-store technology, which anonymously tracked the way people moved through stores, ended last May after customers complained the monitoring was too intrusive.

Mom and Pop Flee Emerging Markets (page C1): Retail investors have led the summer stampede out of emerging-market stocks, bonds and currencies, pulling almost twice as much money as institutional investors such as insurance companies and pension funds. The action highlights the outsize impact mom-and-pop investors can have on global markets at a time of low interest rates, disappointing investment returns and volatile market reactions to perceived shifts in central-bank policy.

SEC Is Set to Propose New Rule on CEO Pay (page C1): The Securities and Exchange Commission will soon thrust CEO compensation back into the spotlight when it proposes a long-delayed rule requiring companies to disclose the pay gap between chief executives and rank-and-file employees. The requirement, a mandate of the 2010 Dodd-Frank financial law, could put added pressure on corporate boards to slow pay increases for chief executives at companies with significant or growing gaps, proponents say. The rule, expected to be approved by the SEC as early as next month, has come under fire from corporations. But it is expected to be less onerous than what lawmakers originally ordered the SEC to adopt, according to people familiar with the proposal. Rather than surveying the entire workforce, the SEC is expected to allow companies to consider a fraction of their employees when calculating median pay. It isn’t clear what percentage of the workforce would be included in the sample. Companies would have to disclose the ratio between CEO compensation and the median pay of the sampled employee group. Median pay is the point on the income scale at which half the employees earn more and half earn less.

Wednesday’s Markets: Stocks End Lower After Jolt by Fed (page C4): U.S. stocks ended a volatile session with broad losses after the minutes to the Federal Reserve’s latest policy meeting provided little clarity on when the central bank might start paring back on stimulus measures. The Dow Jones Industrial Average dropped 105.44 points, or 0.7%, to 14897.55. Soon after the release of the minutes, the Dow fell as much as 122 points, then bounced sharply to be up as much as 17 points, before selling off again. The decline marked the sixth-straight loss for the blue-chip index, the longest losing streak since July 2012. The S&P 500 index lost 9.55 points, or 0.6%, to 1642.80, while the Nasdaq Composite Index fell 13.80, or 0.4%, to 3599.79.

Google May Make a Play on Pay TV (page C10): Google may have found a path to the end zone for Internet TV. Top executives at the search giant met with representatives from the National Football League, according to a report Tuesday by All Things D. Among the topics of discussion: the Sunday Ticket package, which includes all NFL games not in the viewer’s local market and is offered exclusively by DirecTV. There is no indication that Google is anywhere near a deal to offer the package. But the news raises the possibility of a powerful partnership that could be the magic bullet for Google in its goal of luring traditional TV viewers, and associated advertising dollars, to the Internet. Live sporting events are among the primary reasons U.S. consumers pay for TV. Bringing them online as a separate subscription would allow many more people to stop paying for traditional TV. It would also let the NFL broaden its viewer base by selling to those people who don’t pay for TV. For CBS, NBC, Fox and ESPN, all of which have agreed to pay huge sums for the right to carry NFL games, Google’s reach would likely be seen as a serious threat. That said, most of the networks’ deals with the NFL extend to 2022, buying the league some time. And considering the value of football to ratings and affiliate fees, it is difficult to imagine networks turning their backs on the NFL.

Facebook and Google’s Free-for-All (page C10): Google wants to launch balloons; Facebook wants to lighten the data load. Just as conspicuous as these efforts to bring Internet access to the sea of humanity still lacking it, is the fact these two companies aren’t working together on it. On Wednesday, Facebook chief Mark Zuckerberg announced a “rough plan” to connect billions more people in the developing world to the Internet. But while he laid out some nifty ideas for technologies that might make this easier, there’s plenty missing from the plan. That includes some partners likely needed to make it possible, such as wireless carriers. Google isn’t a partner either. Meanwhile, Google has Project Loon, centered on solar-powered balloons that can beam Internet access to places lacking it.

Summer Debate: Avoid the Heat or Embrace It (page D3): Why do some people thrive when the temperature soars, while others can’t think straight without air-conditioning? Variables such as where a person grew up, their amount of body fat and even their hydration level can influence how they feel in hot or cold temperatures, says Michael Sawka, a professor at the School of Applied Physiology at Georgia Institute of Technology in Atlanta. People who avoid going outside when it’s hot—preferring to move straight from an arctic office to air-conditioned transportation to a well-chilled restaurant, store or home—can quickly lose their ability to acclimate, Dr. Sawka says. Without regularly experiencing heat, the body becomes less efficient at sweating and has more difficulty increasing blood flow to the skin—both functions that help the body cool itself. It takes one to two hours a day in hot temperatures to acclimate properly. Then, says Dr. Sawka, “you don’t feel the stress of the heat,” he says. “You feel more comfortable.” When it comes to cold, most people have greater difficulty adapting. Some can eventually learn to ignore uncomfortably low temperatures, but “it’s a lot more dependent on body fat and the size of your body,” Dr. Sawka says.

The Wall Street Journal: Thursday, July 25, 2013

Four Ideas for Fixing Higher Education (page A2): Until now, the federal government’s response to rising college costs has been to spend more on grants, loans and tuition tax breaks. But that is increasingly expensive and does little to assure that taxpayers’ and students’ (increasingly borrowed) money is well spent. So President Barack Obama is on the hunt for alternatives. “Families and taxpayers can’t just keep paying more and more into an undisciplined system,” he said Wednesday at Knox College in Illinois. “We’ve got to get more out of what we pay for.” In one way, the federal approach has worked: It has shielded students and families from even-more-rapid increases in tuition. Still, the average cost of in-state tuition, room and board ($12,110 a year last year) at a four-year public university, after scholarships and tax breaks, has risen 40% faster than economywide inflation over the past decade, the College Board estimates. Private schools are more expensive (average net cost $23,840), but their inflation-adjusted net price has climbed more slowly, at 9%. The president essentially is asking: If the federal government is trying to pay for quality, as opposed to volume, in health care, should it do the same in higher education? Which levers does he have?

  • The Stick
  • The Carrot
  • Transparency
  • Lowering Barriers to Entry

New Homes Sell Briskly, Bucking Rate Rise (page A2): Sales of new homes surged in June despite higher mortgage rates, maintaining momentum for a key sector driving the economic recovery. New-home sales increased 8.3% last month to a seasonally adjusted rate of 497,000, the Commerce Department said Wednesday. That was the highest level since May 2008. Sales were up 38% from a year earlier. The sales jump comes amid a sharp escalation in mortgage rates, which began rising in late May. The average for a 30-year fixed-rate loan is now up about one percentage point from its recent low to 4.58%, according to Mortgage Bankers Association data also released Wednesday. That’s down from 4.68% a week earlier. “The increase in mortgage rates over the past two months does not appear to have dented new-home sales, at least not yet,” said Stuart Hoffman, chief economist at PNC Financial Services Group. He cited pent-up demand, a better labor market and stronger consumer confidence as factors behind the sales boost.

SEC Rules Will Clip the Wings of Angel Investors (page A11): Following through on a key provision of last year’s JOBS Act, the Securities and Exchange Commission has ended the ban on the general solicitation of capital for privately offered securities. The agency’s action is being hailed as a boon that will open the door for vast stores of money that entrepreneurs can use to start up new businesses and hire workers. More likely, the SEC’s move could slam the door shut. That is because the agency’s new rules end the decades-old practice of letting individuals self-certify that they meet the legal rules that allow them to risk their money in a new venture that was not a “public offering.” The SEC has replaced self-certification with a verification scheme that would require most individuals who want to be considered as “accredited investors” to provide detailed personal financial information to entrepreneurs. This is a huge step backward.

Facebook’s Revenue Surprises (page B1): With a big earnings surprise, not all sins are forgiven—but Facebook Inc. is drawing some investors back. On Wednesday, Facebook easily beat second-quarter profit and sale expectations, sending its shares up 17% in late trading. The company swung to a profit as its sales rose 53% to $1.81 billion from a year ago, boosted by a surge in mobile and local ad sales. The company booked a profit of $333 million, or 13 cents a share. Facebook is getting traction in its quest to become what founder and CEO Mark Zuckerberg has called, a “mobile best” company. Since going public last May, Facebook’s stock has floundered, amid persistent concerns the company wouldn’t be able to offset the attrition in its desktop ad sales business and thrive in a mobile world. Facebook’s mobile-ad business rose 75% from the prior three months, to $656 million in sales, and now makes up 41% of its advertising sales. In the first quarter, that percentage was 30%.

Soda Sales Sag, but It’s Not All Because of the Sugar (page B4): It appears sugar isn’t the only thing turning some consumers off of soda. Fake sugar is bubbling up as a worry, too. Larry Young, chief executive of Dr Pepper Snapple, is the latest to voice the concerns. On Wednesday’s earnings conference call, Mr. Young said consumers “love the bubbles, they love the flavor, but they have concerns about artificial sweetener.”  The common narrative around the decline in U.S. soda sales has been that consumers have become more hesitant about high sugar levels, which have made soda a target in efforts to lower the obesity rate. Beverage companies that try to maneuver around those objections by emphasizing diet drinks may not have much luck.

Google Makes Another TV Push (page B5): Google Inc. on Wednesday made another attempt to embed itself into living rooms, after several false starts. The search giant unveiled a $35 device to wirelessly connect TVs to mobile devices so that people can view and listen to Web content on their biggest screens. Google joins Apple Inc.,Microsoft Corp. and others in the race to bring more Web content to the TV screen, which has remained a big focal point of home entertainment even as tablet computers and smartphones have commanded a greater share of consumers’ time. Google’s new two-inch TV device, called Chromecast, looks like a thumb drive, plugs into the HDMI port of a TV and can be controlled by a person’s mobile device or laptop using a wireless Internet connection. The device, which is compatible with mobile devices powered by Google’s Android software as well as Apple iPhones and iPads, went on sale Wednesday at BestBuy.com, Amazon.com and the Google Play online store.

Google May Slow Rollout of Driverless Cars Tech (page B5): Google Inc. , under pressure to slow down development of driverless cars, may crimp the capabilities of the first auto products that it brings to market, people close to the company say. That may mean that cars using Google’s software may not drive faster than 25 miles per hour and may feature a foam front end to limit the extent of damage caused in the event of a collision. The future of the car products — which are not planned to begin entering the market until 2017, has been a topic of heated debate inside the company, say people familiar with the deliberations. One camp favors debuting the “Google Car” with its full capabilities. Others favor taking a more gradual approach, saying it will have to be introduced slowly and with minimal shock to consumers, policymakers, insurers and industry alike. While proponents argue the new technology will provide important societal benefits such as reduced accidents, improved energy efficiency and productivity gains, there are still policy and legal hurdles to be overcome.

Mining Silicon Valley’s Culture (page B5): In roughly the past two years, Target Corp., General Electric Co., Ford Motor Co.,Johnson & Johnson and other big companies have opened outposts in or near Silicon Valley in search of ideas and exposure to new technologies not likely to be created in places like Fairfield, Conn., or Detroit. Such companies spent decades watching from the sidelines as Silicon Valley startups developed into some of the fastest-growing and most influential companies of their time. Not surprisingly, companies from around the world—including retailers and old-line industrial giants—ventured to California to tap some of Silicon Valley’s culture based on risk taking, speed, innovation and both hypercompetition and collaboration. Some of the efforts have paid off with increased e-commerce sales, entries into new markets and faster new-product development. But for every company like auto maker BMW AG that reaped benefits from early partnerships with firms such as Apple Inc.,there are companies like Barnes & Noble Inc. that have struggled to capitalize on their Northern California investments.

Untangling the Numbers for Amazon.com (page C1): Any math buff will tell you right away that 79 is a prime number. But is it a profitable one? With Amazon.com Inc. preparing to unveil second-quarter results on Thursday, the enthusiasm of its Prime customers, who are its most loyal buyers, will be in focus. An analysis by RBC Capital Markets figures they spend about $533 a year in addition to their $79 annual fee for expedited shipping and digital goodies. Even if these shoppers help Amazon’s revenue increase by even more than the 23% year over year that analysts predict, big questions remain. Sure, earnings per share are seen rising fivefold from a year ago to five cents. Aside from the fact that the estimate has dropped steadily from 46 cents last fall, though, those are rounding errors for a stock now fetching $300 a share. The optimistic spin for Amazon is that it is spending heavily today and sustaining losses on products such as its Kindle tablets to rake in profits tomorrow. Following last year’s small net loss, Amazon is seen earning $1.21 a share this year and a far higher $5.95 by 2015, according to FactSet. Even if those projections play out and the company’s price/earnings multiple drops from an eye-watering 250 times today to a mere 50 times, Amazon still isn’t a bargain. And the payoff is years away.

Bond Investors Turn to Cash (page C1): Investors are cashing out of bonds but remain hesitant to plunge into stocks, preferring instead to buy money-market mutual funds despite their low returns. The surprise move highlights persistent investor anxiety with equities even as stock indexes reach new highs. Investors withdrew an estimated $43 billion from taxable bond mutual funds last month, the largest-ever monthly outflow, according to the Investment Company Institute. The debt-market swoon was fueled by worries that the Federal Reserve was softening its commitment to keeping interest rates low. Rising interest rates mean lower bond prices. Many observers expected to see those flows turn to funds tracking U.S. stocks. But in a twist, the main beneficiary of the rush out of bonds has been money-market funds, which are cash-like investments that appeal to safety-minded investors.

Wednesday’s Markets: Investors Develop Fear of Heights (page C4): U.S. stocks declined Wednesday, as the latest push to record highs lost steam amid a mixed bag of corporate earnings reports. The Dow Jones Industrial Average declined 25.50 points, or 0.2%, to 15542.24, retreating from its record closing high set Tuesday. The Standard & Poor’s 500-stock index lost 6.45 points, or 0.4%, to 1685.94, after setting its own record Monday. The tech-heavy Nasdaq Composite Index gained 0.33 point, less than 0.1%, to 3579.60. The Nasdaq got a boost from a strong quarterly earnings report from consumer-electronics giant Apple Inc.

Google Casts Chrome as a New TV Star (page C10): Google already makes a ton knowing what websites you visit and what you are searching for. Soon it may profit by knowing what you watch on TV. That is the subtle brilliance of a small device it released Wednesday. Called “Chromecast,” it is a $35 attachment that plugs into a high-definition TV, enabling users to broadcast video and other content from their smartphone, tablet or computer directly to their television. Even more interesting is the so-called “cast” button that makes Chromecast work. Similar to websites that incorporate Facebook’s “like” button, the cast button will enable users to stream content from websites or mobile apps directly to a TV via Chromecast.

When a Retweet is Less Sweet, Try Favoriting (page D2): What’s trending on Twitter? The use of an option known as ‘favoriting,’ which is becoming a go-to tool for some people who long for a more discreet, less public way to navigate the raucous waters of the popular social network. The Twitter feature allows users to mark with a star icon tweets they find amusing or useful. Doing so both bookmarks the tweet and alerts its creator that they appreciate the sentiment without republishing it in their own streams. The rise in ‘favoriting’—or starring, as it’s also known—is a safer way to engage with others on the network. Rather than retweeting risky comments or observations, users can more quietly add their approval or note their amusement by favoriting.

Beating America’s Fittest Mayor (page D6): Chicago mayor Rahm Emanuel is routinely described as America’s fittest mayor but here’s the thing: If you’re a respectably fit 50-something endurance athlete, it shouldn’t be nearly as difficult as you think.

The Wall Street Journal: Wednesday, July 24, 2013

Apple Profit Slides, Hit by Demand Slowdown (page A1): Apple Inc. proved Tuesday there is still demand for its venerable iPhone in the face of stiff competition, though it is running into trouble convincing consumers to buy its other gadgets. Apple and its rivals have faced increasing concern that the consumer electronics industry’s boom over the past few years has started to slow. That phenomenon was evident in Apple’s latest quarter, when it sold 20% more iPhones than a year earlier, but more customers opted for cheaper models. Its other offerings fared worse. Sales of the company’s iPads dropped 14% from a year earlier and demand for Macs fell 7%, contributing to a second consecutive quarter of declines for Apple’s overall revenue and profit. Apple’s total profit declined 22% to $6.9 billion on roughly flat revenue of $35.3 billion. But the company remains vastly profitable, with a staggering $146.6 billion in cash and investments at the end of the quarter.

Menthols Could Increase Addiction Risk (page A3): The Food and Drug Administration said Tuesday that menthol-flavored cigarettes likely pose a greater health risk than regular cigarettes, and signaled it is considering regulatory action that could restrict sales, a move that could take years. In a preliminary assessment of the possible health effects of menthol cigarettes, the federal agency said current data don’t show such cigarettes are more toxic or increase the risk of smoking-related diseases compared with regular cigarettes. But the FDA found that menthol in cigarettes likely increases smokers’ addiction, and that menthol smokers “are less likely to successfully quit smoking.”

FDA Moves Against Diabetes Treatments (page A3): The Food and Drug Administration is acting to stop U.S. sales of nearly two dozen products marketed as diabetes treatments that the agency said are illegal and can be ineffective, counterfeit or in some cases dangerous. (One of the best treatments – diet and exercise!)

Getting Personal with a Tiger (page A6): Reaching out to families of disabled children is a growing practice at zoos and aquariums across the U.S. They are tapping into a desire by such families to have their children spend time in the summer with similar kids, since during the school year such special-needs students increasingly are taught in regular classrooms under the “mainstreaming” move. “This gives them opportunities to socialize with one another, because in the normal school setting, they don’t get to do that,” said Zoe’s mother, Desirée Christian.

China Weighs Environmental Costs (page A7): China is rethinking how it manages its economy, as mounting evidence reveals the heavy toll that unbridled growth has had on the environment and on health. The government said recently it would name and shame China’s dirtiest cities as well as force factories to disclose environmental standards publicly, in an attempt to bring them into line. It also set a target of cutting emissions intensity in key industries by 30% by 2017’s end. These latest environmental- protection steps are part of “the most aggressive policy effort to address air-quality issues in Chinese history,” said Jun Ma, chief economist for Greater China at Deutsche Bank. They are part of Beijing’s strategy to confront the damaging environmental consequences of a rollicking economy. But moves to clean up the nation’s backyard face ingrained resistance from many officials, especially local ones, who are immersed in a culture that rewards economic performance alone. Growth “was always one of the key indicators,” said Hu Tao, a former Chinese environment ministry researcher now at the World Resources Institute in Washington. “The system encouraged local governments to focus on developing faster.”

It’s Possible to Graduate Debt-Free. Here’s How (page A13): Figures from the Federal Reserve Bank of New York reveal that 37 million Americans have student loan debt. About two-thirds of students receiving bachelor’s degrees borrow to fund their education, with the average student debt at an all-time high of $26,000. Total student-loan debt is estimated to be $1 trillion. Only 38% of borrowers are making payments on their loans. The rest are either still in school, postponing payments or not paying them back. Almost one in 10 students who started repayment in 2009 defaulted within two years. At least 40% of student borrowers put off a major purchase such as a car or home because they couldn’t afford it, and many are delaying marriage and families. The lesson here is that students should do everything within their power to avoid this kind of debt. Although attending school without loans is difficult, it is not impossible. Here’s what I learned about avoiding the debt trap: Scout out scholarships, take courses online, use your skills to make money and get a summer job.

Daddy, Could You Tell Me What a Truck Driver Was? (page B1): And then one day, man went the way of the mule. Some 5.7 million Americans are licensed as professional drivers, steering the country’s vast fleets of delivery vans, UPS trucks and tractor-trailers. Over the next two decades, the driving will slowly be taken on by the machines themselves. Drones. Robots. Autonomous trucks. It’s already happening in a barren stretch in Australia, where Caterpillar Inc. will have 45 self-directed, 240-ton mining trucks maneuvering at an iron-ore mine.

AT&T Hit by Rising Competition, Expenses (page B4): AT&T Inc.’s second-quarter profit slid 2.1% as the telecommunications giant’s operating expenses jumped and the competitive environment heated up. In the latest period, AT&T added 551,000 customers who signed long-term service contracts, compared with 320,000 additions a year ago and 296,000 in the first quarter. Verizon Wireless—the joint venture of Verizon Communications Inc. and Vodafone Group PLC—last week said it added 941,000 of the most profitable contract subscribers. One competitive factor in the quarter was that T-Mobile US Inc., the country’s fourth-largest wireless carrier, began offering the iPhone. AT&T’s “churn”—the average monthly percentage of contract customers who left during the quarter—rose to 1.02% from 0.97% a year earlier. AT&T has seen spikes in customer defections each time a new competitor gets the iPhone, AT&T Mobility CEO Ralph de la Vega said. But he said churn was down from the first quarter, and the spike was “significantly less” than when Verizon and Sprint Nextel Corp. acquired the Apple Inc. device. “We’ve weathered Verizon getting the iPhone, Sprint getting the iPhone and now T-Mobile,” said Mr. de la Vega in an interview.

RecruIting of M.B.A.s by Startups Is Rising (page B8): Startup companies are stepping up recruiting at business schools. This past school year, 57% of business schools saw an increase in startup recruiting for full-time positions, according to a survey by the M.B.A. Career Services & Employer Alliance, an industry group for career-services officers and recruiters. Overall, the job market for M.B.A.s continues to improve, buoyed by hiring in the consumer products, energy and technology sectors, though growth has slowed a bit from 2012, the survey indicates. While young companies still account for a small share of the job market for business graduates, and some startups explicitly avoid hiring from the M.B.A. pool, business students are increasingly interested in opportunities at such firms. Networking plays a large role in landing those jobs, and schools have responded to the shift by strengthening ties with alumni and responding to requests for individual student candidates. Alumni-initiated hiring and such direct referrals are gaining popularity as a method of choice, according to the survey, while traditional recruiting activities, such as career fairs, are waning somewhat.

Tuesday’s Markets: Stocks Stagger to a High (page C4): U.S. stocks were mixed in quiet trading with the Dow Jones Industrial Average eking out a fresh high. The Dow rose 22.19 points, or 0.1%, to 15567.74, topping a prior record set on July 18. The Standard & Poor’s 500-stock index, however, fell 3.14 points, or 0.2%, to 1692.39, with technology leading six of 10 industry sectors lower. The tech-heavy Nasdaq Composite Index also fell, dropping 21.11 points, or 0.6%, to 3579.27.

U.S. Takes Back a Banking Crown (page C4): n a sign of shifting fortunes on both sides of the Pacific, Industrial & Commercial Bank of China Ltd. has ceded its crown as the world’s top bank by market capitalization to Wells Fargo & Co., six years after ICBC gained the top spot on the eve of the financial crisis. When ICBC wrested the global banking mantle from Citigroup Inc. in July 2007, the shift was hailed as a milestone in China’s rise as an international economic superpower. The subsequent near collapse of many large Western banks, including Citigroup, only added to the sense among many observers that banks in the U.S. and other slower-rising, rich nations had become riskier than those in poorer but fast-expanding China. But reduced expectations for China’s economic growth and a cash crunch that hammered the nation’s financial sector this spring—along with signs that the U.S. economy is recovering and the end of ultralow interest rates may be in the offing—have shifted those perceptions again. A long-awaited rally in U.S. bank shares has lifted the value of companies such as San Francisco-based Wells Fargo and J.P. Morgan Chase & Co. of New York.

Best in Show Not Enough for Apple (page C14): Apple doesn’t care about making “the most” devices, so much as it cares about making “the best” ones. That philosophy, as reiterated by Apple chief Tim Cook at a May conference, is worth keeping in mind as investors cheer the company’s results for the fiscal quarter ended in June. Those showed Apple sold five million more iPhones than expected, at 31.2 million. Even so, Apple’s smartphone market-share gains have stalled. That may not be such a concern given that focus on making “the best” devices. But it does raise a potentially troubling question: What if the iPhone and iPad go the way of the Mac?

Toys for Tight Schedules (page D1): Keeping a child amused for hours on end isn’t the only aim of toy makers. They are increasingly creating playthings aimed at busy kids who only have bite-size bits of time to play—a trend some in the industry are calling “snack toys.” School-age children are increasingly playing in short bursts of time between organized activities—whether on the sidelines of a sibling’s soccer game or at home, between piano lessons and homework. And while many parents default to their smartphone or another electronic device as a quick diversion, toy companies are working hard to maintain their market by refreshing traditional games and playthings to be shorter-playing, more portable and faster to clean up. Toy manufacturers have long expanded and updated versions of their most popular toys, and some have ventured into the digital realm, creating phone apps for everything from Uno to Yahtzee. In recent years, more companies have also tried to speed up game play in ways that don’t involve tapping on a screen.

Apps to Help You Forget You’re Exercising (page D3): Lost your motivation for working out? A crop of smartphone apps aims to turn exercise into a game, complete with a virtual cheering squad in some cases. Traditional fitness apps can help people develop an exercise routine and track their progress. But the newer game apps offer social encouragement for exercise and some entertainment too, said Steve Portenga, chief executive of Denver-based iPerformance Psychology, which works with professional and amateur athletes. It’s a good way “to shake things up because some people find working out incredibly boring.” Games can motivate people to exercise if they use the right game mechanics, said Debra Lieberman, director of Health Games Research, a program at the University of California, Santa Barbara, that studies ways digital games can improve health. Simply bribing a person with cash and points doesn’t lead to long-term behavior change after the bribe goes away, Dr. Lieberman says. “The best apps motivate players to fulfill intrinsic desires such as to be fit and healthy, feel good, have fun, and be socially connected,” she says. Here are some fitness apps that aim to keep things interesting.

 

The Wall Street Journal: Tuesday, July 23, 2013

Housing Rebound Leaves Some Behind (page A1): First-time home buyers, long a key underpinning of the housing market, are increasingly getting left behind in the real-estate recovery. Such buyers, typically couples in their late 20s or early 30s, have accounted for about 30% of home sales over the past year. They represented 40% of sales, on average, over the past 30 years, and accounted for more than 50% in 2009, when recession-era tax credits fueled the first-time market, according to data from the National Association of Realtors. The depressed level of first-time buyers could prove to be a drag on the housing rebound and the broader economic recovery over the longer haul. First-time home buyers are the foundation of the real-estate market and are major contributors to their local economies, often buying up older homes, revitalizing communities and spending money on furniture and renovations.

Parents Shell Out Less for Kids in College (page A4): Parents are giving their children less cash to pay for college amid continued economic weakness, adding to pressure on students to borrow money, rely more on grants and scholarships—and in many cases, live at home. Parents shelled out an average of $5,727 from their income and savings for each child’s college costs in the 2012-2013 academic year, down more than a third from $8,752 in 2009-2010, according to an annual report on college funding by student loan provider Sallie Mae to be released on Tuesday. The share of college costs paid by parents out of income and savings fell to 27% from 37% three years ago. The figures don’t include borrowing by parents, which also declined slightly in the period.

The House That Lego Built (book review – page A15): The patents on the core product of the Lego Group—its famous build-it-yourself bricks—expired decades ago, yet the company seems to be thriving: Its gross profit margin of 71% is far higher than that of other major toy companies and, for that matter, Apple. It was not always thus. Only 10 years ago, Lego was posting record losses; retailers were backlogged with unsold Lego toys; and it was unclear whether Lego would survive as an independent company. An internal review discovered that 94% of the sets in its product line were unprofitable. The turnaround story that followed is well told by Wharton professor David Robertson in “Brick by Brick.” As a family-owned Danish company, Lego isn’t watched closely by the American business press. Yet its story may hold as many lessons as those of companies whose chief executives adorn magazine covers. In Mr. Robertson’s diagnosis, Lego’s near-collapse came not from a lack of innovation but from an excess of it—more precisely, from innovation without discipline.

Netflix Subscriber Growth Comes Up Short (page B1): Netflix Inc. posted a stronger quarterly profit and continued to add customers, a sign that its bold and in some ways risky shift in programming strategy is paying dividends. The Los Gatos, Calif., streaming-video provider said it gained 630,000 U.S. streaming subscribers in the quarter ended June 30, the midpoint of its guidance range but short of Wall Street’s expectations. Netflix shares fell 6.2% in after-hours trading, after sliding 1% in 4 p.m. trading. The company finished the quarter with 28.6 million paid domestic customers, a shade behind Time Warner Inc.’s HBO, which had 28.8 million as of March 31, according to SNL Kagan. Netflix Chief Executive Reed Hastings reaffirmed his previous statements that the company could reach 60 million to 90 million subscribers over time, but struck a note of caution. “The larger we get, the harder it is to grow,” he said on a video webcast the company held in lieu of a traditional earnings call. The headwinds for Netflix include stiff competition from Amazon.com Inc. and Hulu as well as customer defections, or “churn” that makes it hard for subscription-oriented businesses to grow beyond a certain point.

Firms Fortify Fraud Defenses (page B8): Thousands of companies world-wide are planning to update systems and policies that act as their first line of defense against fraud and other hidden risks, following a sweeping overhaul of the most widely used guidelines for those safeguards. The new guidelines, which many companies expect to adopt by the end of next year, are for so-called internal controls, which the government has required U.S. public companies to have in place for the past decade, as part of an effort to protect investors. Companies might, for example, establish procedures to make sure that only employees responsible for certain types of inventory can access it, or require a particular method for inputting purchase orders. Having these systems helps companies monitor the transactions for errors, impropriety or fraud. Until now, internal controls have been based on a 20-year-old framework that didn’t take into account the new risks posed by mobile technology and cloud computing, as well as the rise of outsourcing and shifts in corporate governance.

5459: The Number of Public U.S. Companies Not Required to Have Auditors Evaluate Internal Control (page B8): U.S. public companies exempt from a requirement that external auditors sign off on their internal controls far outnumber those that are covered by the rule. The exempted companies, which are generally small, are more likely to make financial restatements and errors, according to a study released this month by the Government Accountability Office, the investigative arm of Congress. The report recommended that U.S. market regulators consider requiring companies to disclose whether they obtained auditor opinions on their internal controls—their in-house safeguards against fraud and other threats to corporate assets. The Sarbanes-Oxley Act of 2002 requires corporate managers to certify that their company’s internal controls are working properly. Some 3,671 nonexempt companies obtained opinions from their outside auditors in 2011 on how those controls were operating, but another 5,459 companies weren’t required to do so, according to the report.

Monday’s Markets: Stocks Step Over a Low Earnings Bar (page C4): Stocks edged higher as investors weighed weak earnings news and fresh signs of a pause in the housing recovery. The Dow Jones Industrial Average gained 1.81 points, less than 0.1%, to 15545.55, with the blue-chip index weighed down by a disappointing profit report from McDonald’s. The Standard & Poor’s 500-stock index gained 3.44 points, or 0.2%, to 1695.53, but that was enough to push the benchmark to another record close. The Nasdaq Composite Index advanced 12.78 points, or 0.4%, to 3600.39.

Fed Plays a Part at (Profit) Margins (page C10): The hefty profit margins U.S. companies have been delivering in recent years have been variously ascribed to cost cutting, productivity gains and globalization. Another reason might be the miracle of low interest rates. Second-quarter results are pouring in, and once again profit growth is outpacing that of sales. By Standard & Poor’s latest reckoning, companies in the S&P 500 will report earnings per share that are, in aggregate, 4.4% above their year-ago level. That compares with per-share sales growth of 3.3%. As a result, net-profit margins look set to expand again, with earnings hitting a record 9.6% of sales. Heaven knows more cost-effective operations have something to do with that: Employee compensation as a share of gross domestic product is at its lowest level in nearly 60 years for a reason. The emergence of low-cost manufacturing centers, like China, surely plays a role, too. But an analysis conducted by independent strategist Brett Gallagher shows that low interest rates have done much to bolster margins. Given the superlow interest-rate era may soon start drawing to a close, that could be another reason for investors to question just how long margins can hold up.

A Better Digital Diagnosis (page D1): With an abundance of websites and apps offering similar services, consumers are increasingly acting as their own diagnosticians when they experience a new health problem. That can be alarming for doctors, especially if patients show up armed with a scary list of unlikely maladies from the Internet, demanding expensive and unnecessary tests. It can also be dangerous for patients if they fail to seek expert medical advice for a problem after mistakenly concluding they don’t need a doctor. Now more health-care providers are turning the tables, steering patients to new and improved computerized symptom-checkers that make it easier for them to get reliable information about possible diagnoses, research their condition and even connect directly to a doctor. Doctors are adding these tools to their websites and incorporating them into electronic medical records, encouraging patients to use them before office visits to save time and make consultations more productive. Another benefit: Results turned up by a symptom-checker may actually help doctors think of something they hadn’t considered.

How an Introvert Can Be Happier (page D1): Extroverts, those outgoing, gregarious types who wear their personalities on their sleeve, are generally happier, studies show. Some research also has found that introverts, who are more withdrawn in nature, will feel a greater sense of happiness if they act extroverted. Experts aren’t entirely sure why behaving like an extrovert makes people feel better. One theory is that being talkative and engaging influences how people respond to you, especially if that response is positive. Others speculate that people get more satisfaction when they express their core self and opinions. Another possibility: Happiness might come simply from having successfully completed a goal, such as giving a speech.

Rising Addiction Among Teens: Smartphones (page D2): Roughly 1 in 5 students in South Korea are addicted to smartphone use, according to the government. This addiction is defined as spending more than seven hours a day using the phone and experiencing symptoms such as anxiety, insomnia and depression when cut off from the device. Earlier this month, the South Korean government said it plans to provide nationwide counseling programs for youngsters by the end of the year and train teachers on how to deal with students with addiction. Taxpayer-funded counseling treatment here already exists for adult addicts.

Quick Cures/Quack Cures: Don’t Let Stomach Trouble Spoil Vacation  (page D3):

  • Is a large coffee in the morning a good choice
  • Some home remedies call for a spoonful of mineral oil
  • What’s the best laxative
  • What can people eat to steer clear of medicine
  • Does exercise help

 

The Wall Street Journal: Wednesday, July 10, 2013

In-State College Students Take the Hardest Hit (page A3): Tuition at four-year state schools increased at a faster rate for in-state students than their out-of-state classmates in the past three years, according to a report released Tuesday by the U.S. Department of Education. The report highlights the tricky balancing act public schools faced as they grappled with significant cuts state legislators made to their budgets during the recession. Between the 2010-11 and 2012-13 academic years, the average tuition and fees for full-time, first-year, degree-seeking undergraduates at four-year state schools increased 6.7% to $7,526. Out-of-state students saw their tuition and fees increase 4.1% to $17,404.

Student-Loan Pretenders (page A12): Government researchers continue to show that federal student loans are hazardous to both students and taxpayers. But Senate liberals don’t seem to care, as long as the money keeps flowing to their constituents in the nonprofit academic world. As the Senate prepares for Wednesday voting on student-loan subsidies, a coalition that includes congressional Republicans, President Obama and moderate Democrats favors reform that ties the rates on student loans to the 10-year Treasury rate. This protects taxpayers from having to guarantee low fixed rates to students while the government’s own borrowing costs rise. And it provides some marginal encouragement to students to consider whether their chosen course of study is worth the money.

Kroger’s Tastes Go Upscale (page B1): A high-low strategy has served Kroger Co. well, but on Tuesday it said it is spending $2.44 billion to get that much better at the high part. The grocery-store operator said it would buy Harris Teeter Supermarkets Inc., a small upscale chain with 212 stores, mainly in the Southeast. The deal plays into Kroger’s strategy to fend off Wal-Mart Stores Inc. and other discounters by lowering prices on staples like bread and milk even as it attracts more affluent shoppers with items like dry-aged beef and exotic cheese. “We do a nice job on the high-end customer but there are some things Harris Teeter does better. We expect we can learn a thing or two from them,” Kroger Chief Executive David Dillon said in an interview. In particular, Harris Teeter strengthens Kroger’s position against rivals like Whole Foods Market Inc., which has fatter profit margins. Whole Foods, which has 322 U.S. stores compared with more than 2,400 stores for Kroger, boasts a stock market value of $20.3 billion, bigger than Kroger’s $19.2 billion. Based in Matthews, N.C., Harris Teeter is a fraction of Kroger’s size. Kroger, the nation’s largest traditional grocery company, generates $97 billion in annual revenue, including gasoline sales and its jewelry business, compared with Harris Teeter’s $4.5 billion in 2012.

A ‘Brick’ Sits Atop China’s Biggest Web Company (page B1): Alibaba Group Holding Ltd. is facing new competition as online shoppers migrate to smartphones, pushing the Chinese e-commerce company to seek acquisitions and better ways to take advantage of its vast user database, its new chief executive said. Jonathan Lu, who succeeded founder Jack Ma in May, said in his first interview as CEO that Alibaba could make an initial public offering at any time but that “there’s no timeline or date.” An offering could value the company at US$70 billion, based on analysts’ estimates, making it one of the world’s biggest Internet IPOs and a much sought-after prize for bankers and stock exchanges. Bankers and investors have said they expect an offering this year. The 43-year-old, who joined Alibaba in 2000 and has run every major business at the company, said Mr. Ma asked him to become CEO three days before the announcement was made. Understated where Mr. Ma is outspoken, Mr. Lu said, “they call me ‘a brick’ because I can fit anywhere.”

The Office Nurse Now Treats Diabetes, not Headaches (page B1): Workplace health clinics used to be a lot like the school nurse’s office, dispensing Band-Aids, treating occupational injuries, and serving as a first stop for emergencies like asthma attacks. But as companies face rising insurance costs and an aging workforce, they’re turning clinics into something new: A place to aggressively nudge employees about long-term, expensive conditions such as diabetes, hypertension and high cholesterol.

The Hits Keep Coming for Emerging Markets (page C1): Investor fears that the end of easy money is at hand are ricocheting around the globe, slamming financial markets and squeezing economic growth prospects from Brazil to Turkey. In the latest fallout, the International Monetary Fund on Tuesday trimmed its global-growth forecast, reducing its projections for emerging markets such as China and Russia. The report highlights the difficulties facing nations that recently were flooded with investor cash amid a global search for yield, but now face outflows as interest rates rise in the U.S. The IMF’s move underscores the ripple effects as markets brace for the withdrawal of central-bank stimulus policies. Scores of riskier markets have been whipsawed since Federal Reserve Chairman Ben Bernanke signaled this spring that the central bank’s monthly bond purchases, currently $85 billion, eventually will be curtailed.

‘Important’ Labels for GE Capital and AIG (page C3): American International Group Inc. and General Electric Co. unit GE Capital Corp. could pose a risk to the U.S. economy if they were to falter, U.S. regulators said Tuesday in designating the two firms “systemically important.” The two companies became the first nonbank financial firms to be brought in for greater oversight, higher capital requirements and other new rules under a key provision of the 2010 Dodd-Frank financial law. They join a number of large banks and financial-market utility firms that were previously named systemically important by regulators, making them subjected to oversight by the Federal Reserve. Members of the Financial Stability Oversight Council, which is led by the Treasury Department and includes the heads of the major financial regulators, voted unanimously to designate the two firms after a lengthy, multistage review process. “These designations will help protect the financial system and broader economy from the type of risks that contributed to the financial crisis,” said Treasury Secretary Jacob Lew, who chairs the oversight council. While officials stressed that the decision doesn’t signal that either company poses a current risk, regulators did determine that “material financial distress at these companies—if it were to occur—could pose a threat to U.S. financial stability.”

Tuesday’s Markets: Stocks Keep on Rolling (page C4): Stocks rose, pushing the tech-oriented Nasdaq Composite Index to a 12-year high as earnings season got off to a decent start. The Dow Jones Industrial Average advanced for a fourth straight session on Tuesday, adding 75.65 points, or 0.5%, to 15300.34, the blue-chip index’s longest winning streak since April. The Standard & Poor’s 500-stock index rose 11.86 points, or 0.7%, to 1652.32, with industrials leading nine of 10 sectors higher. The Nasdaq Composite gained 19.43 points, or 0.6%, to 3504.26, topping its May 21 close of 3502.12, for the highest finish since October 2000.

Overheard: Netflix to Host Live Video Discussion in Lieu of Earnings Conference Call (page C14): Netflix is planning a new original show: its second-quarter earnings call. The Internet-video company said it would be hosting a live video discussion in lieu of a conference call after it reports earnings July 22. Rich Greenfield, a BTIG Research analyst, and Julia Boorstin, a CNBC reporter, will moderate the discussion with Netflix executives. The new format replaces Netflix’s previous practice of having executives answer questions, posed by the company’s director of investor relations, which had been submitted by analysts in advance.

America’s Next Top Super Berry? (page D1): Move over, acai. Food and flavor companies are hunting for the next big berry. Berries are nutritional royalty these days for their reputation as both a “low glycemic food” and a rich source of antioxidants, the substances that may protect cells against the damaging effects of “free radicals.” And like a dash of red lipstick, berries provide a splash of rich color and an upscale aura to supermarket products ranging from breakfast cereal and granola bars to juices and yogurt. Their fan base spans from the health- and diet-conscious community to picky toddlers. Most berries want to emulate blueberries, which have transformed from tasty things found in muffins and pancakes to stars of the produce aisle, says Lu Ann Williams, head of research for Innova Market Insights, based in the Netherlands. Now more varieties want to make the leap from seasonal treat to staple. Since 2008, Innova says, U.S. marketers have introduced 358 products with goji berries as an ingredient, about 200 with bilberry and more than 500 with elderberry, the latter driven largely by its use as a natural food coloring. “They’re here to stay,” Ms. Williams says.

berries

Children Who Happily Do Chores, No Nagging Required (page D1): Few parents see digital games as a promising way to pry kids off the couch—much less inspire them to be useful around the house. But a new generation of chore apps, designed primarily for the under-12 set, aims to turn kids into bed makers, laundry folders and toy picker-uppers by offering rewards ranging from funny collectible monsters to redeemable digital coins.

‘…But I Really Want to Be a Youtube Star’ (page D2): More writers, producers, viewers, advertisers and broadcast television executives are turning their attention to YouTube to scout for talent. Wall Street Journal reporter Katherine Rosman recently invited YouTube creators and behind-the-camera marketers and brokers to discuss how the creative process can become a business in an interactive video conversation on the site Spreecast. Edited excerpts.

Two Ways to Hit ‘Print’ on a Mobile Device (page D3): Most people assume they can’t print from a tablet or smartphone because their printers are older and/or aren’t equipped with Wi-Fi capability. This week, I took a closer look at two of the many free consumer-oriented solutions seeking to put that myth to rest: Presto (formerly FingerPrint) by Collobos Software and ThinPrint Cloud Printer by Cortado.They make printing from mobile devices as simple as hitting print on a computer.

 

The Wall Street Journal: Wednesday, July 3, 2013

A Novel Way to Fund College (page A2): As lawmakers in Washington remain at loggerheads over the student-debt crisis, Oregon’s legislature is moving ahead with a plan to enable students to attend state schools with no money down. In return, under one proposal, the students would agree to pay into a special fund 3% of their salaries annually for 24 years. The plan, called “Pay it Forward, Pay it Back,” would create a fund that students would draw from and eventually pay into—potentially bypassing traditional education lenders and the interest rates they charge. The state would likely borrow for the fund’s seed money, which could exceed $9 billion, but the program’s designers intend it to become self-sustaining.

For NSA, Hackers Are Both Needed and Risky (page A4): When President Barack Obama last week called intelligence leaker Edward Snowden a “hacker,” the comment was designed to be dismissive. But the president also put his finger on a growing fear among national-security officials: that others in the ranks of young, tech-savvy new recruits could prove as unpredictable as they are indispensable. Faced with accelerating technological advances over the past decade, and pressed to outsource vital government services, U.S. spy agencies are reaching ever further outside the traditional government hierarchy for expertise. That approach likely led them to Mr. Snowden, a community-college dropout whose sophisticated computer skills trumped his lack of formal education, a situation that has become increasingly common in hiring within the National Security Agency, officials there confirm. The 30-year-old’s work as an NSA infrastructure analyst gave him the ultimate insider’s access to national secrets. “We have developed this hacker concept, so we want the people that will be the best at breaking into a network,” said Dickie George, who served as the NSA’s technical director of information assurance, responsible for recruiting those who have proven technical skills, before retiring in 2011. The NSA, he said, “will take a chance on somebody who has the skills we need,” even a person without a college degree or government experience.

Wanted: Gurus with Actual Experience (page B6): What can a 20-something Tunisian medical intern teach senior managers at KPMG LLP? A lot, apparently. Skander M’zah, a doctor who participated in the 2010-2011 Tunisian revolution, was one of about a dozen speakers featured at the accounting firm’s October 500-strong new-partner meeting in New Delhi. The topics of Mr. M’zah’s speech included lessons learned during Tunisia’s political turmoil and how to mentally prepare for change. Companies have long hired motivational speakers and business “gurus” to address employee audiences. But lately, fueled by demand for a more tangible return on investment and boredom with the regular speaker circuit, event planners are tapping CEOs, historians, and even fighter pilots, to offer a fresh take on topics such as crisis management and corporate culture. The shift has been accelerated by growing fervor for TED talks, a conference series featuring short addresses from multiple academics, politicians and executives. Inspired by the enthusiasm surrounding such talks, KPMG staged its meeting as a TEDx event, under the TED umbrella but independently organized. “It’s not just telling someone else to go out and do something,” says David Lavin, whose Lavin Agency represents the founders of Kiva and ING Direct, neuroscientists and politicians, among others. “[Speakers] are saying, ‘Look what I’m doing. It’s pretty cool. What are you doing?’ ”

Asking Price

  • Biz Stone, Twitter co-founder: Has spoken at: The Art of Marketing, Turnaround Management Association, Hult International Business School Booking Fee: $75,000 (est.)
  • Tony Hsieh, Zappos CEO: Has spoken at: Ernst & Young Strategic Growth Forum, General Mills, Credit Suisse Entrepreneurs Summit; Booking Fee: $75,000 (avg.)
  • Kate Tellers: The Moth senior producer: Has spoken at: Beam’s Global Marketing Conference, Kellogg Foundation, Mass Mutual, Nike; Booking Fee: $15,000 (avg.)

The Hunt for the Never-Been-Done ETF (page C1): Maybe the Wall Street financial-product machine really can run out of new ideas. Just 70 exchange-traded funds and other exchange-traded products were launched from Jan. 1 to June 30, according to IndexUniverse LLC, a research firm in San Francisco. The total is down 44% from 126 in the same period a year earlier. The slide is a sign the market for ETFs—which hold a bundle of investments and boomed in the past decade as a cheaper, tax-efficient alternative to traditional mutual funds—has gotten so saturated fund companies are struggling to come up with niches that aren’t served by existing ETFs.

Dividend Stocks Enter New Era of Caution (page C4): Jitters about Federal Reserve policy have made investors more cautious about stock sales by companies that pay high dividends, but the window is still open for new offerings. Investors may no longer be rushing to buy just about anything with a high yield at just about any price, as they seemed to be doing at times during the first five months of the year. Yet interest rates are expected to remain exceptionally low even if the Fed begins to scale back its stimulus efforts. That, many analysts and investors say, will continue to fuel a search for yield through dividend stocks, and provide an appetite for new offerings. At the same time, the kind of improved growth outlook that would lead the Fed to taper its easy-money policies could encourage stock sales by companies more sensitive to economic growth. Investors look to shares of these companies because they offer potential for price appreciation.

Tuesday’s Markets: Shares Erase Gains as Investors Brace for Friday (page C4): U.S. stocks ended a volatile but low-volume session with slight losses, as some jitters over Friday’s key jobs data and a jump in crude-oil prices kept sentiment in check. The Dow Jones Industrial Average lost 43.55 points, or 0.3%, to 14932.41. The Dow was up as much as 74.26 points at the intraday high and down 104.45 points at the low. The Standard & Poor’s 500-stock index declined 0.88 point, or 0.1%, to 1614.08, and the Nasdaq Composite Index eased 1.09 point, or less than 0.1%, to 3433.40.

Meet the Speed Cleaners (page D1): We are eating faster, talking faster, driving faster. So it stands to reason we want to clean faster too. Unwilling to engage in housecleaning marathons, consumers have a new strategy—frequent bursts of mess-busting touch-ups. Cleaning a kitchen counter or bathroom sink now often happens with a passing swipe. Plates get wiped with a sponge and a squirt of soap. Floors get washed one spill at a time. The change is creating a nation of housecleaning multitaskers who can clean a stovetop, cook and chat on the phone at the same time. They have a high tolerance for rooms that are works-in-progress—and a low tolerance for Saturday afternoon scrubbing sessions. Consumers used to clean the way their mothers showed them to. But the shift to speed cleaning is happening so fast that companies are racing to keep up. Makers of cleaning supplies, who translate a slight change in human behavior into billions in sales, are tracking the shift closely, updating decades-old products and inventing new ones. The most common and fastest-growing cleaning technique is touch-up cleaning, defined as a task that takes 15 minutes or less, according to research from SC Johnson & Son Inc., maker of products including Windex and Pledge. Touch-ups now account for 70% of all cleaning, up from 40% five years ago.

Walter Mossberg: Ways to Edit Videos to Be Not Too Long, Not Too Short (page D1): Very short videos are having their moment. Twitter’s Vine smartphone app, which shoots and posts clips of up to 6 seconds, has been a hit. And Instagram, the wildly popular photo-sharing app owned by Facebook, recently added shared video clips, which can last 15 seconds. These clips are infinitely less work than traditional digital videos, which often take hours to edit in programs like iMovie and run 15 or 20 minutes or more. But instant, no-work short clips also convey limited content. Instead of a whole holiday gathering, they tend to capture quick moments during a day, like a baby or pet doing something cute, friends acting goofy, or just a glimpse of a more meaningful event. They’re like animated snapshots. What if you could easily produce videos long enough to show viewers a decent chunk of a memorable occasion, yet short enough to avoid being boring and hard to share? Well, there are services that let you simply gather relevant photos and video clips, and upload them for automated video editing. There, they get boiled down, enhanced with effects and turned into professional-looking videos typically lasting from one minute to a few minutes, accompanied by music, and easily shared. These programs let you choose styles, or visual themes, and videos are produced in accordance with the themes and the music. This week, I tested two such services, Magisto and Animoto. Both work on iPhones and Android phones, but also via Web browsers on PCs and Macs. Both offer free versions, as well as paid versions with richer features. I found both worked well, but Magisto was easier to use. It, however, offered fewer options and less control. It’s focused on automated video editing based on algorithms it claims allow it to deduce the gist, or emotion, of the video, in accordance with the theme. Animoto offers more customization, with a greater variety of styles and more manual controls. It keys its production mainly from the music you choose. Each has some drawbacks, but I generally preferred Magisto. It took less time and its free version offers longer videos. I’d use Animoto if I wanted greater control.

 

The Wall Street Journal: Monday, May 6, 2013

Colleges Retreat in Tuition Showdown (page A1): Private U.S. colleges, worried they could be pricing themselves out of the market after years of relentless tuition increases, are offering record financial assistance to keep classrooms full. The average “tuition discount rate”—the reduction off list price afforded by grants and scholarships given by these schools—hit an all-time high of 45% last fall for incoming freshmen, according to a survey being released Monday by the National Association of College and University Business Officers.

Stock Buybacks Help Propel Bonuses for Executives (page B2): Safeway Inc. Chief Executive Steven Burd received a $2.3 million stock award this past March in part because he oversaw a 61% jump in the company’s per-share profit last year. The earnings increase didn’t come from the grocery chain’s sales, which barely budged. And it didn’t result from Safeway squeezing out more profit as its operating margin narrowed. What made the difference was $1.2 billion in stock buybacks mostly financed with borrowed money. By reducing the number of shares by which Safeway’s profits had to be divided, the buybacks lifted per-share earnings growth by about half. That improved a metric used to determine the CEO’s incentive pay. As corporations step up stock repurchases to return cash to shareholders, compensation targets tied to per-share earnings—a common factor in executive-pay calculations—are helping to increase many executives’ pay. The link worries some investors and compensation advisers because they fear the figure is too easily manipulated. The debate is a tricky one, though, because buybacks are generally seen as a plus for shareholders and thus something to be encouraged. The critics argue that executives have too much leeway to inflate per-share results via buybacks without improving their companies’ operating performance. “If you’re a CFO or a top executive, you can determine if the EPS goes up or not based on a stock buyback,” said Robin Ferracone, chief executive of pay consultant Farient Advisors. She said some companies have abandoned per-share earnings as a metric because of the concerns.

For Watches, a Quirky Time (page B8): Swiss watchmakers have long built their reputation on accuracy and workmanship. Now, a new breed of craftsmen is competing for a slice of the global watch boom by offering outlandish designs. Take the Horological Machine No. 3, a quirky creation by Geneva-based MB&F that does away with conventional features such as a watch’s face and hands and looks more like something from a science-fiction movie than a timepiece. Its spaceship-like design features revolving number barrels representing hours and minutes that are housed in separate cockpits, while ceramic ball-bearing systems resemble rocket engines. “You need guts to wear what we make,” said MB&F founder Maximilian Büsser, whose company makes just 20 HM3 watches a year. The model, which comes in either white or red gold, costs 85,000 Swiss francs ($91,000) and weighs more than 150 grams. Mr. Büsser’s watches weren’t the only ones pushing the boundaries at this year’s Baselworld Exhibition, the world’s largest watch and jewelry show, which took place in late April and early May. With smaller marketing muscle and distribution networks, independent watchmakers are cramming eye-catching features into their products as they seek the attention of customers who can be lured from market leaders Swatch Group AG, which owns Omega and Longines, and Cie. Financière Richemont SA, whose brands include IWC and Cartier. Breitling SA’s Emergency II, a watch worthy of James Bond, doubles as a distress beacon when the owner pulls two 18-centimeter antennas from the watch case. The Emergency II then sends signals containing details of the owner and his location to satellites, which relay the information to rescue services. Jaermann & Stübi AG, a watchmaker based in Rapperswil, Switzerland, is targeting the well-heeled golf set with its Stroke Play watches, which allow a player to use the timepiece to log the number of shots taken. By manipulating the watch’s buttons, the wearer can compare handicaps and record performances on one of two extra dials on the face. Analysts and watchmakers say the trend toward the unusual isn’t likely to end soon and will be most visible at the high end. People with money to spend want something distinctive, an alternative to the well-made but increasingly common watches of the traditional luxury brands, they say. Mr. Büsser, the science fiction-inspired watchmaker, said that will push a small group of craftsman to continue seeking unusual designs. “Mechanical watches have no practical reason at all to exist anymore,” he said. “The only reason is because they are works of art.”

Lesson from Buffett: Doubt Yourself (page C1): There was no big news at Berkshire Hathaway Inc.’s annual meeting this past weekend, but there was one great lesson for investors: Perhaps the most important thing you can do when everything seems to be going right in your portfolio is to listen to somebody who insists you are wrong. To spice up the annual ritual, Berkshire’s chairman, Warren Buffett, invited someone who has placed a bet against the stock—short-seller Doug Kass of hedge fund Seabreeze Partners Management—to join the panel of analysts posing questions to Mr. Buffett and vice chairman Charles Munger. Carp, if you will, that it didn’t take much bravery for Mr. Buffett to give air time to one skeptic among the more than 35,000 worshippers who would trample their grandmothers to kiss Mr. Buffett’s feet if he took his socks off. Complain, as many already have, that Mr. Kass’s questions weren’t all that tough. Then ask yourself: When is the last time the management of a major U.S. company sought out unrestricted criticism from someone betting against the stock?

Can Earnings Keep Up? (page C3): 14.0 – the price-to-earnings ratio of the S&P 500 over the next 12 months, compared with 15.2 and 25.6 at market peaks in October 2007 and March 2000.

LinkedIn’s Real Value: Knowing All About People in All the Right Places (page C8): Dear LinkedIn: Please put up a few more disappointing quarters so investors who have missed the boat can pile in. Smart types long ago realized the professional social network is more than just an improved online job board. LinkedIn Corp.’s main product, driving 57% of first-quarter sales, is enterprise software. It charges recruiters about $8,500 annually for premium tools to find, contact and track a wide pool of desirable job candidates. Alternatively, a headhunter may charge a quarter of a new hire’s first-year salary. Fill one slot and LinkedIn pays for itself. That should help the company to steadily raise prices, especially as more members sign up and it adds new features like “endorsements” where skills listed on a profile are verified by contacts. A more modest price increase went into effect this quarter. But LinkedIn raised prices to $8,200 from $7,000 in the first quarter of 2011. Since then, the number of corporate customers has risen nearly fivefold to more than 18,000. One reason clients didn’t seem to mind the higher price is the expanding pool of potential hires: Over the same period, the number of LinkedIn users has leapt to nearly 220 million from 90 million.

A New Era for Do-It-Yourself Investing (page R1): Do-it-yourself investing is gaining newfound popularity—but with a twist. Instead of going it entirely on their own, more investors are pursuing a kind of modified DIY approach, tapping an array of increasingly sophisticated online tools and a-la-carte advice services offered by financial firms. The result is that there has been strong growth in customer assets at the mutual-fund and discount-brokerage companies that have traditionally served the do-it-yourself market, a group that includes Vanguard Group, Fidelity Investments and Charles Schwab Corp.

Keep Your Portfolio Simple (page R4): When it comes to your portfolio and investing practices, more isn’t always better. With well over 8,000 mutual funds and exchange-traded funds, as well as a variety of complicated trading strategies, from which to choose—not to mention the 401(k)s, individual retirement accounts and other accounts a person can collect over a career—simplifying a complicated portfolio can seem anything but, well, simple, says Jeff Corliss, a senior vice president at RDM Financial Group Inc. in Westport, Conn. But, he says, it’s an important task. Experts say streamlining helps investors get a handle on what assets they have and what they’re paying to own them and can help eliminate redundancies, an important step in building a diversified portfolio. Here are four ways to simplify and streamline a portfolio and keep savings on track without sacrificing diversification:

  1. Consolidate Accounts
  2. Use Index Funds
  3. Put Investing on Atopilot
  4. Use All-in-One Funds

The Cold Truth About Emotional Investing (page R6): When it comes to investing, emotion is commonly seen as a weakness that must be shunned. But new research from professors David Tuckett and Richard Taffler suggests that emotions play an inevitable part in all investing, by amateurs and pros alike. In their recent book “Fund Management: An Emotional Finance Perspective,” the professors present the results of interviews with 52 experienced fund managers in the U.S., U.K., France and Asia. The picture that emerges is one of acute anxiety and emotional conflict. The bottom line, they say: Individuals and pros perform better when they acknowledge that investing is inherently emotionally charged and when they understand how emotions affect their behavior.