New Lesson: Don't Wave To Police

Not posting on police violence toward U.S. civilians isn't because there's been none.  Now, when you wave to police, it risks provoking the kind of escalating confrontation that got the unarmed 17yo Deven Guilford shot seven times and killed after flashing his headlights to alert an officer that his high-intensity headlights appeared to be set on high-beam.  And don't expect the district attorney to do justice:  you and your mom (whom the police beat while tazing you) will be fed to the local prosecution machine and driven to penury fighting fabricated charges.

Apparently the only safe strategy is not to be noticed at all.

Butcher's Graphic Novel DOWN TOWN

Jim Butcher, author of the Dresden Files, Codex Alera, and the Cinder Spires series, has just released a Dresden Files story in the form of his Down Town graphic novel collection from Dynamite Entertainment.  Fans of the Dresden Files (worshipfully reviewed here since 2008) will want to read them for completeness, but they contain enough backstory that one need not already be a fan to follow and enjoy.  (The backstory isn't heavy, and doesn't distract.)  Readability for those who don't already know the novels is an improvement from War Cry, in which prior knowledge of Harry's allies is important when help arrives in the nick of time.  Down Town feels the most solid Dresden Files graphic novel so far.  The art by Carlos Gomez gives a distinct character to everyone readers have only imagined from the novels, and co-writer Mark Powers has helped craft Butcher's concept and outline as a fully-developed graphic novel.

Down Town opens a few months after the close of White Night.  This is important, as it drives the story villain and forces Harry into confrontation/cooperation with the gangster Marcone, whom Harry just helped become a signatory to the Unseelie Accords (a treaty between the world's major supernatural forces).  Now that Marcone is the "Baron" of Chicago, and his protection rackets include guarantees against supernatural threats, he's attracted a new class of adversary.  When the action begins, Molly is giving Harry attitude about his instruction methods while, unbeknownst to most of Chicago, an awful menace threatens the city.  Mostly, because Marcone has claimed it.  Which, of course, Harry's signature made possible.

Oops.

Readers of the books will immediately discover something the books don't offer: omniscient perspective.  The main story line in the Dresden Files is all first-person from Harry's perspective, which limits what Butcher can show the reader (by limiting what Harry can know without spoiling the story solution).  While this means developments can be a surprise to the reader, they limit the things the story can do to build suspends.  Remember how much more exciting it was to see a Hitchcock scene when you knew about the bomb ticking beneath the table?  Omniscient perspective lets Butcher show you what in a Dresden Files book would be the villain's off-screen action.  It helps paint the villain's perspective and motives when they're not immediate and personal.  In a work this length, it aids the setup so the story feels believable while making sure the reader doesn't miss any of the mayhem occurring anywhere in town.  Although the short stories from secondary characters' perspective offer a view into their minds, Down Town offers a view into Harry's mind, then Molly's, during the same story arc.  It's fun to watch how they (mis)understand what's going on about them and haul themselves out of one jam after another.

As with the Dresden Files novels, Down Town depicts the secondary characters with all the strengths they possess:  Marcone's iron will, Molly's quick-thinking use of less-flashy magic, and Murph's heroism in the face of unreasonable circumstance.  Down Town provides enough disasters, twists, and reversals to keep readers on the edge of their seats, and as with the Dresden Files universe when it's at its best the solution to the story's problem isn't more force but more finesse.  It's a fun story, showing Harry and his friends and frenemies pitted against a supernatural threat perfectly suited to the Dresden Files universe.

Although the story is solid enough to entertain those who aren't established fans of the books, the additional color on Molly's apprenticeship, Muphy's off-screen police work, Bob's local spirit contacts, and so forth will especially endear the story to fans who can't get enough of the characters and their world.

Hilary's Worst Nightmare? Not Trump: Sanders.

In explaining his decision to run for President, Trump described himself as Hilary's worst nightmare.  Trump hasn't been reading the news.  According to CNN, Bernie Sanders would beat Trump by an even larger margin than Hillary Clinton.

Hillary's worst nightmare is a real liberal, capable of getting liberal votes instead of merely getting "Defeat the Republicans" votes.

To emphasize: Bernie Sanders had better polling against Trump than Hillary Clinton.  Among registered voters surveyed for the CNN poll,  Clinton would beat Trump 56% to 40%, whereas Sanders would defeat Trump 59% to 38%.

As for Trump, his "I'm not Hillary Clinton" candidacy doesn't seem to have done him much good among voters, even if he's got the highest name recognition in the un-thinned Republican field.

Article on Apple: Why It's A Buy

Seeking Alpha published a new Jaded Consumer article, this one on Apple.  Apple's Fall: Why It's A Buy.

Enjoy :-)

Iced Tea Report: Hungry's on Memorial Fails the Iced Tea Refill Test

If you can spot what's wrong with this glass of iced tea, you're doing better than the staff of Hungry's Café & Bistro on Memorial Drive in Houston, Texas.  (Reviews on Yelp)

Normally poor iced tea performance is balanced by something going right with the food, but the food came so slowly I am aware only that we avoided cannibalism, and can't really report with authority on how anything tasted because we'd gone feral.

Usually I stop at the Hungry's on Rice Blvd., where I'm sure the tea is larger and I've been able to persuade servers to keep it full.

Maybe next time.

Cop Killers

A "Black Lives Matter" activist named Sandra Bland died recently in the jail of Waller County, Texas.  Sandra Bland, 28, was about to begin a new job at Texas A&M University before she was killed in custody.  Pulled over ostensibly for failure to signal a lane change, she was arrested rather than cited.  To defend itself from criticism of the arrest, the department released a video showing her arrest by an officer who later asserted the unarmed woman had "assaulted" him.  Although the video contains obvious signs of editing, the department denies that the video was ever edited.

Speaking with her mother about her new job, Bland had said, "My purpose is to go back to Texas and stop all social injustice in the South."

Well, Waller County had an answer for that, didn't it?

Instead of protecting the citizens, police in the United States have a developed a reputation for using force to coerce citizens into complying with a variety of ridiculous demands (why did Sandra need to exit her vehicle to receive a citation for failure to signal a lane change?), or skipping the demands and moving straight to the killing.  The police killing of Caroline Small emphasizes the ability of police to kill unarmed civilians with impunity even if they aren't men trying to purchase an unloaded air rifle at Walmart, or for allegedly shoplifting.  Maybe – at least in New York, when the officer is a rookie – there's at least an apology for killing a civilian for deciding to take the stairs.  The culture of killing American civilians is an epidemic among U.S. law enforcement.  Suicide by cop just doesn't work in places like the United Kingdom:  they don't kill people.  While acknowledging that the United States has a greater population (~319 million) than the United Kingdom (~64 million), the rate of police killings of civilians is vastly different than the population difference:  despite that U.S. data on police killings is incomplete because reporting to the F.B.I. is purely voluntary, the U.S. death toll from "justifiable" killings by police was more than 400 individuals, while British police discharged their weapons in the line of duty a grand total of three (3) times, with zero fatalities.  British shootings of civilians by police is extremely controversial even in the case of a known gangster.  In the U.S., the hypermilitarized "police" now occupying our cities seem virtually expected to kill.  For some real perspective:  U.S. police killed more people this March than U.K. police have killed since 1900.  Last year, the death toll was 1,100 killed in the U.S. compared to twenty-six (26) in the U.S.  This isn't some multiple based on population difference, it's a cultural problem in U.S. "police" forces.

FIFA Bans Whistleblower (who's 70 and has cancer)

FIFA previously halted ethics proceedings against one of its officials who'd been caught using his FIFA office to benefit from corruption;  the 70-year-old had been diagnosed with colon cancer and guaranteed FIFA he'd never officiate again.  However, the ex-official turned state's evidence, resulting in prosecutions that included multiple extradition requests from Switzerland, so FIFA retaliated with the gratuitous step of imposing a lifelong ban against his officiating in national or international soccer events.

Priorities.

American General Notices Putin's Thugocracy A Threat

At least someone's noticing Putin's innocent-faced invasion of its neighbor illustrates the harm he's willing to cause when convenient.  In order to conceal the scope of the wars Putin conducts in secret, he's declared "peacetime" troop deaths a state secret.  Well, of course.  People might notice they're actually at war.

Convicted for Blackness

In yet another example of what's all too common in the American criminal prosecution apparatus, an African American man was convicted and sentenced to hard labor where he languished for 23 years after the real perpetrator has been convicted.  Investigators told prosecutors no evidence existed to link Robert Jones to robberies, murders, and a rape – and that their evidence on the perpetrator was rock-solid (he wore the stolen jewelry, carried the gun ballistics proved fired the killing bullets, and admitted owning the distinctive getaway vehicle seen at each scene).  But the prosecutors had Jones in custody, and he was black, so despite their memos that show they knew there was no admissible evidence linking him to the crimes in any way they argued to a jury he was a dangerous criminal associate of known evildoers and had to be put away for murder, robbery, and rape. (His name was provided to a tip line when a $10k reward was offered; presumably, the tipster understood naming a black man was good business.)

Cop Whistleblower Retaliation in Missouri

The problem that those entrusted with responsibility will fail to exercise the diligence they're paid to exercise, but will instead act in their own interest to do things that are more convenient to themselves personally, is so well-known that the management literature has developed a term of art to describe it:  the agency problem.  The agency problem confronts voters whose legislators enact undesirable laws at the behest of monied special interests just as it confronts citizens whose police decide to use their badges and guns for some purpose other than to protect and serve.

Or … choose simply to protect and serve only their buddies with badges and guns.  In one case, a Missouri police officer who answered honest questions about the in-custody death of a college student (accused of a misdemeanor) was effectively punished by his superiors for stepping out of line.  Allowing police to be held accountable to the public isn't in the interest of the self-interested police.  Read about the case here.

The problem isn't police only.  The problem is the agency problem and its solutions are applicable to shareholders who want Boards who protect shareholders instead of looting the firm to enrich themselves, to protect voters who want legislators to pass laws that comport with public concepts of justice and reason, and to protect members of the public who don't want to fear violence from police who are protected from the consequence of any misconduct they choose to commit.  The agency problem is the problem of business just as it is the problem of democracy.

Faithful agents mean the difference between justice and oppression, fair returns and fraud losses, free elections and a mislead public.

The agency problem matters.

No Trial Needed: How Mr. Browder Died

New York magazine offers an articulate look at how the criminal justice system's servants took the freedom, and ultimately the will to live, from a teen charged with a felony the government never bothered to bring to trial.  The story is called "How All New Yorkers Killed Kalief Browder" and it's worth your time.  If you don't live in New York, the bail statute is likely much more restrictive, increasing the probability that an accused will languish in jail for years. 

I had a civil client I met in a Montgomery County jail whom I discovered had been in custody more than a year without trial.  His last attorney had tried to get him a plea deal that the State liked, to improve his bid to obtain a job in the prosecutor's office.  Other appointed counsel hadn't done much on his case because they weren't paid to prepare it for trial, they were paid to show up for court settings.  Getting paid for something outside a scheduled setting took extra work, and was iffy.  Whether the client did it or not, we should provide the same due process we'd like to receive ourselves – because the rule is there to protect not criminals we expect should lose, but to protect US when we're broke and wrongly accused. 

If the law and its servants can't do that, they have failed.

On Apple's Debt-Funded Share Repurchases

Seeking Alpha just published the Jaded Consumer article "Apple's Debt-Funded Repurchases: Terrific or Terrible?"

Stop by for the gripping conclusion :-)

Nanny State: Crime For Kids To Play In Own Yard

The headline says it all: "11-Year-Old Boy Played in His Yard. CPS Took Him, Felony Charge for Parents."

UPDATE: the mother, charged with a felony, now fears for her job.  Good going, cop-phoning neighbors.  You stick the kids in a stranger's house where they're fed nothing but cereal for days, impose a small fortune in Court-mandated therapy that prevents the family from enjoying its summer plans, and terrify the kids of their insane government while threatening their mother's job.  A+.

FIFA Prosecutions: Good for Transparency in Sport

This article raises some interesting questions about FIFA.  If the organization is working to clean house like it says, prosecutions for corruption can only bolster the hand of FIFA officers urging compliance with the law.  But, did they push out an officer for making a joke about corrupt FIFA officials?  Are they not as committed to cleaning house as they claim?

There's a lot of money in worldwide sports, and lots of temptations.  The corruption scandals in the Olympics surely illuminate this, and the need to watchdog sporting organizations in order to prevent sporting events from excluding talented athletes merely because they haven't mastered the art of graft.

Retired Cop's Nonsense Explanation For Police Violence Explains A Lot

This video segment does a great job of showing how one retired cop explains away violence against unarmed peaceful protestors by saying that (a) there was violence someplace else, and (b) someone else shot police someplace else.  Therefore, he argues, we should understand police beatings and tear-gassings at peaceful protests by unarmed people.  You kind of have to see this to believe it.

The African American guest has it right:  the retired white cop can't connect any of his grievances against those involved in violence against police with the violence actually witnessed by the guest.  So he makes up explanations to get the conclusion he wants, which is that all the police violence is justified.

If the retired cop's view reflects that of active members of police forces around the country, it's no wonder there's escalating violence against civilians:  cops feel tit-for-tat violence (and killings) is justified.  No wonder people chant "No Justice, No Peace."  And no wonder it makes thugs like the retired cop nervous.  They intend violence and know they're the problem.

Unarmed Man Killed By Cop Who Just Got Off Suspension for Killing Unarmed Man

If you've been following the Jaded Consumer coverage of America's national epidemic of killings by police, you'll be unsurprised at what should be shocking news.  This time, a Walmart called the police on a woman who approached to ask what her son supposedly stole before he was murdered by the boys in blue.  She's been stonewalled – unsurprisingly – by the department who loosed its known killer on the civilian public despite knowing his history killing an unarmed civilian.

TSA: Not What We Hoped For

Apparently creating a new Federal agency to delay you on the way to your flight doesn't create genuine security in airports.  Surprise, surprise.

Doc's Financial Self-Interest Wasn't In Infants' Interest

It's well-known that certain procedures are riskier in hospitals that do few of them.  Such is the case with St. Mary's Medical Center, a Tenet Healthcare (Ticker:THC) hospital in Miami Beach, Florida.  Its Board-Certified pediatric surgeon Dr. Black (who's white, incidentally) told Mrs. Campbell he'd never lost a patient at St. Mary's before he killed her daughter – the fourth to die after he attempted a complex cardiac procedure on a newborn at St. Mary's.

So, why does a doc BS patients like this?  Running the pediatric surgery program at a hospital that aspires to make big bucks on highly-compensated procedures is a sweet gig.  The annual salary of a Board-Certified pediatric surgeon is bigger than most Americans' life savings, and running a program involves an especially big bunch of boodle.  And the doc's got to make the hospital enough money to justify the payments.  Apparently, Dr. Black didn't want to lose the sale.

Although state regulators didn't find problems with the hospital, the chairman of the Cardiac Technical Advisory Panel for Florida's Children's Medical Services (part of Florida's Department of Health) found problems.  St. Mary's extremely low case volume left it without the skills to meet the national average mortality for the complex cardiac procedures it managed to convince cardiologists to refer to the hospital.  Consequently, the hospital's mortality rate was calculated by CNN using Freedom of Information Act requests to Florida regulators and determined to be about three times the national average.  Tenet Healthcare claims that's untrue, but won't provide the true number.

Go figure.

***
UPDATE: Ninth infant died in connection with St. Mary's pediatric cardiac surgery program.

UPDATE: Florida regulators won't investigate complaint lodged by dead patient's mother.

Iraqi City of Tikrit Freed from Tyranny, Looting Follows

When 20 houses were set on fire, 50 shops looted, and trucks loaded with stolen goods escaped unhindered, an Iraqi official explained: "No plans were made for what to do with the city after it was liberated[.]"  Now, where have we seen that before?

RIP Internet Explorer

Microsoft is killing its Internet Explorer brand.  Maybe because anyone who knew better snickered at it?  Codenamed Spartan, the next browser from Microsoft should suck less.  How could it not?  Hopefully for victims users the revolution is more than skin deep.

Berkshire: High Growth?

Seeking Alpha recently published the Jaded Consumer article "Berkshire Hathaway: High Growth Stock?"  To get another view on this, look at Berkshire vs Microsoft chart in "Apple's Future After Joining Dow: Brighter Than Microsoft's", which compares Berkshire to Microsoft in the decade and a half following Microsoft's addition to the Dow.  Solid >8% annualized performance at Berkshire  trounced the global desktop OS leader over the period.

Apple's Future After Joining Dow: Brighter Than Microsoft's

Last week, Apple Inc. (once known as "Apple Computer Inc.") replaced AT&T in the stock index called the Dow Jones Industrial Average. (The author says "called" because it is not, in fact, an average.) The responses to this - ranging from "Apple is doomed" through "So what?" to "Yay, index funds now have to buy Apple!" - largely overlook the fundamentals that will drive whatever future Apple will provide its investors. This article contrasts Apple's position to the future that lay before Microsoft Corp. when it joined the Dow in 1999.

Numbers

From November 1, 1999 (the date MSFT joined the Dow) through last Friday, Microsoft's stock's ups and downs landed it down over 8%. Since its market cap declined even faster, it's clear the current price benefited from its share buyback program, without which the company's declining market cap would have left each share down more than three times that much:


Microsoft has paid dividends since 2003. After an annual dividend of 8¢/sh in its fiscal 2003 and one of 16¢/sh in its fiscal 2004, Microsoft paid a $3 special dividend in December of 2004 a regularly quarterly dividend thereafter. Including 31¢/sh payable March 12. 2015, Microsoft's dividend history - since the inception of dividends in 2003 - paid shareholders who held over the period a total of $9.97. Added to Microsoft's Friday close of $42.36, this puts holders for the period at $52.33, up from its split-adjusted close on November 1, 1999, of $32.87 - a total return (before taxes) of $19.46 (59.2%), or nearly 3.1% annualized over the period. Although this initially looks better than the ~47% return of the S&P 500 over the period …



… it doesn't match the S&P 500 period return with dividends (>90%, and >4% annualized). Although Microsoft's dividend has been reliable since its inception - enough to beat its stock price decline - its competitor Hewlett Packard Co. began paying dividends earlier, putting Microsoft only modestly ahead over the period compared in investors in its biggest publicly-traded OEM vendor.



The apparent yield of Microsoft in 2005 results from its $3 special dividend in December of 2004; it never had a double-digit dividend yield. YCharts presents a total-return chart showing returns adjusted for dividends as they're paid, showing the relative performance of Microsoft, its largest remaining US-listed OEM vendor, the S&P 500 (because it's a common benchmark), and Berkshire Hathaway Class B (BRK.B)(because it's a widows-and-orphans investment always worth comparing to anything):

 

Annualizing these numbers over the decade and a half period since Microsoft joined the Dow renders them fairly modest. Berkshire's total return of 248.1% annualizes to a bit over 8%, which isn't bad considering the market dislocations of 2001 and 2008. The fact that investing in a tech giant like Microsoft would fail to beat the S&P 500 probably came as a surprise to high-conviction long-term investors certain Microsoft would continue to dominate the world in market cap as it once did.

What Microsoft Was Up To When It Joined The Dow

To understand Microsoft's lackluster performance as a Dow component, it's not enough to nod knowingly and say that it'd grown too big. When Apple passed Microsoft in market cap on May 26, 2010, mathematical law didn't halt its outperformance. Far from it:



(The total return chart reflects both companies' dividends.)

To understand why Microsoft's performance in the early 2000s held the company back, it's necessary to look at what it was doing to grow at the time. In 1999, Microsoft owned the PC desktop operating system market and held a hugely profitable share of the market for server operating systems and tools, and was just deciding to make gaming consoles, a loss-leader business in which it only lost money until 2004. Its zeal to obtain a monopoly in digital music formats and to secure royalties from every music player in every car, home stereo, and Walkman, Microsoft drove Apple into music players and inspired Apple's Music Store to protect Apple's customers from losing access to new music promised by Microsoft's threatened era of Microsoft-only music formats. Frightened of losing control of servers to virtualization firms like VMWare, Microsoft bought VirtualPC from Connectix Corp. (now dissolved) and rewrote its already-complicated licenses to charge customers a premium if they wanted to install Microsoft's products on virtual servers - something high-uptime management makes mandatory. In doing so, it raised OEM and customer incentive to consider alternatives. When Microsoft's FUD campaign against Apple music players failed, Microsoft gave up securing music file format hegemony through its PC model (i.e., having OEMs make hardware while licensing its software at little cost to Microsoft), and leapt into the portable music player market only to abandon it. Microsoft created, marketed, and abandoned a Microsoft eBook reader, only to fund an eBook venture with Barnes & Noble Inc. (BKS) in which Microsoft lost hundreds of millions before bailing out in December.

Meanwhile, Microsoft made its operating systems costlier for OEMs to deploy on desktops. It also complicated its OS licensing scheme to ensure that while it would hold the bottom end share (to prevent encroachment by newcomers), it would profit much more from the higher-end market segment and command a premium from enterprises and pro users who depended on highly parallel application operation, remote administration, and access to networks through centrally-controlled credentialing systems. While working to leverage its OS monopoly into earnings growth, it saw mobile platforms grow in relevance - non-Microsoft mobile platforms that offered competitors a foothold in bringing developers and customers from dependence on Microsoft-controlled APIs, developer tools, and licensing fees. Microsoft's mobile device licensing fees drove mobile OEMs to competitive platforms, but mobile hardware is a cut-throat business and Microsoft optimistically cheered while firms with an established history making and marketing hardware were driven from the field.  (Whether Microsoft cheered oblivious to its own plight or to distract attention from it is your guess.)

Apple's entry into smartphones in 2007 changed the face of mobile competition. Besides Apple, only the world's unit sales leader profited in the smartphone market. But Apple added to its hardware complete control over the software it shipped, so that it produced superior performance for users even in areas in which its hardware specs arguably lagged. Competing with Apple required vendors to invest their own resources in their mobile OS development, reducing margins on a device count that could not compete with Apple's comparable products. (The bulk of the smartphone market consists of cheaper, lower-margin phones whose hardware wouldn't compete even with software customization.)

Eleven years after joining the Dow, Microsoft used expertise it acquired with the Danger acquisition to launch its own phone hardware in May of 2010 - but it didn't effectively market the phone's greatest strength (cloud backup) and failed to include features users had come to depend on in the profitable segment of the phone market. The billion-dollar Danger acquisition led to a major product flop. (Apple had product flops, too - as described here. Marketing isn't everything.) After subsidizing Nokia Oyj to produce hardware shipping a Microsoft mobile OS, Microsoft purchased Nokia's hardware division only to share a non-iOS/non-Android global share of 4% with such struggling competitors as Blackberry Ltd. (formerly Research In Motion, which approved a sale of itself to a third party a few years ago but was apparently stymied by regulators) and Jolla Ltd. (privately-held 125-employee vendor of the Sailfish OS). On the way to this ignominious position, Microsoft had to endure headlines like "Samsung's Bada OS growing faster than Windows Phone". (Samsung merged Bada's best components into the Linux-based Tizen project, with which Samsung - much like Microsoft - hopes against the odds to take the "third choice" OS spot behind the market leaders.) Using Nokia to sell phones probably looked better then it still led global cellphone unit sales, but recently it's been struggling only to lose not only share but absolute sales.

What Apple is Doing As It Joins the Dow

Apple earns more profit than all other smartphone vendors combined, and the smartphone market remains a growing market. In the first quarter of 2014, only Apple and Samsung profited selling smartphones: together, they shared 106% of the global smartphone profit. The also-rans - including Microsoft - lost money to stay in the game. The interesting fact is that Apple made most of this money - 65% - while holding less than 16% unit sales share. In the last calendar quarter of 2014, Apple's phones reportedly raked in 89% of the world's smartphone profit even as the profit pie grew.

Apple is doing this while selling a minority of global units. Not only is the market growing, but Apple hasn't come anywhere near saturation.

Even as Microsoft commands the majority of the market for PC operating systems, Apple makes more profit than any of Microsoft's OEMs despite holding relatively modest share. In the last quarter of 2012, Apple's computers took 45% of the PC market's profits while selling but 5% of the PC units. By the third quarter of 2014, Apple grew PC profits to 50% of global share on the same 5% unit share. This isn't the result of some flash-in-the-pan Mac fad but of the market segment Apple pursues - what ZDNet called "the only segment of the PC market that still matters". And by holding a sizeable minority of this richest segment, Apple not only establishes itself among those who need machines in that segment but establishes a base from which to grow its reach into that segment.

Unlike Microsoft, Apple hasn't joined the Dow controlling a saturated low-growth market that forces it to look toward loss-leader markets like game consoles for growth. Apple didn't enter music players or phones with the idea of losing money to gain share, or even profiting on a razor-and-blades model of earning back on content what was lost on hardware. Apple makes good money on its hardware, and keeps post-sales revenue as pure gravy. And it's an interesting gravy market. After selling $10 billion through the App Store in 2013, App Store revenue grew 50% in 2014 - during which Apple paid developers $10 billion. While this may be modest in the scale of Apple's overall revenue, the key is to consider what this does to Apple's ecosystem: Apple developers have earned $25 billion from iOS development alone. What developer would leave a market like that? Apple's successful after-sales program ensures developers target Apple platforms first and support them with the most engineering resources. The points made in 2012 about Apple's ability to tempt developers with a user base that pays for and updates software remain valid. By building MacOS X - and therefore iOS - upon a Cocoa environment that allows a single application to support an unlimited number of languages, Apple built international support into every product it sold since departing MacOS 9. As a result, Apple's products enjoy predictably hard-to-satisfy demand in markets - like China - in which Apple couldn't compete at all when Microsoft joined the Dow.

As Apple continues to thrive in its high-margin market segment, Apple puts devices in the hands of customers with a proven willingness to pay for quality. As predicted in 2011, Apple expanded its iOS electronic wallet system into a payment processing business. Since the ApplePay rollout, Whole Foods Market Inc. saw "significant growth" in mobile payment use with double-digit week-over-week growth of ApplePay volumes and 400% growth in mobile payments by the end of January. In under a month, Apple had 1% of Whole Foods' entire transaction volume. By the end of January 2015, ApplePay accounted for 80% of all mobile payments at Panera Bread Co. (PNRA). Three months into the product's launch, ApplePay handles $2 of every $3 spent through contactless payment across the three largest card networks in the U.S. ApplePay's security doesn't keep card-issuing banks from foolishly believing fraudsters actually hold the bank's cards, but since each issuing bank sets the procedure it will use to determine whether an ApplePay user is its authorized card holder, this should improve. The ApplePay global rollout is still underway. But since Apple's mobile customers outspend competitors' customers, Apple stands to participate in a prime section of the payment processing market. Despite having a smaller number of users, iOS devices drove five times Android users' spending between Black Friday and Christmas last year. Not only were purchases more frequent, but average purchase size doubled on iOS. Whatever might be said about Samsung's mobile payment platform, it's Apple's customers that will make its payment processing more profitable.

And that's not the only growing business. Apple's "hobby" in AppleTV poises it to assault a multibillion-dollar television market while vending content. Apple's also about to launch a smartwatch, which Piper Jaffray said would face disinterest as only 14% of those surveyed would buy one for $350 without having been able to see or use it (up from 12% in an earlier poll). No disrespect, but if 14% of those surveyed would buy a product for $350 without being able to see or use it beforehand, this is either a very acquisitive demographic that's being surveyed or there's a shocking demand for an Apple watch. Most of us tell time on our phones, no? Recall, if you will, that Apple first entered the phone business with an ambition of gaining 1% of the cellphone market.

In the last quarterly results announcement, Apple guided to a March-ending quarterly revenue between $52-55 billion. At the top end, this represents 20% growth over the year-ago quarter, even accounting for foreign-currency headwinds.

Conclusion

Adding Apple to the Dow may result in some transient sales as funds adjust holdings, but the real returns will follow Apple's performance. Unlike Microsoft when it joined the Dow in 1999, Apple stands at a high-growth period that starts with a projected growth in this March-ending quarter of some 20% over the comparable quarter last year. Apple continues to strengthen its high-margin product segments even as it grows the value of its ecosystem through post-sales opportunities. Rather than descending into low-margin market segments in the quest for growth as Microsoft did following its addition to the Dow, Apple is still growing its most high-margin businesses while adding mechanisms to improve post-sales revenues opportunities. Apple isn't dead after being added to the Dow, but very much alive - and represents much better deal than Microsoft did when it joined the Dow at the end of the millennium.

Disney's Alchemists Turn Lead Into Gold

Seeking Alpha just published the Jaded Consumer article Disney Alchemists Convert Lead to Gold On Command.  Read how Disney reorients its resources toward unencumbered intellectual property to improve its margins.

Myke Cole Hits Target with Gemini Cell

Set in the universe of his first Shadow Ops trilogy, Myke Cole's new novel Gemini Cell requires no background from prior books to enjoy. This was also true of his first trilogy's capstone volume, Shadow Ops: Breach Zone (reviewed here);  Cole has a gift for writing books that you can enjoy without additional background. That having been said, you should go enjoy them, especially if you're reading this while Gemini Cell is still a few weeks from release.

Overview
Gemini Cell is set in an alternate universe in which modern-day military technology and tactics meet paranormal superpowers poorly understood by the government (or by initially-oblivious citizens).  Unlike the first Shadow Ops trilogy – in which government regulations spelled out how individuals who manifested powers should register and be dealt with – Gemini Cell is set in the early days of the paranormal awakening that sweeps the globe, before the rules are clear, and before the protagonist has any idea what he's in for once he find himself "in business" with supernatural practitioners.

The fact that nobody seems to understand the rules governing the supernatural powers on display in the book means that the protagonist has little ability to tell when he's receiving accurate information about the limits and consequences of his paranormal predicament, when he's being fed a line of bull, or when he's looking at fools who have no idea what they're talking about.  This raises one of the major themes of the book: information quality.  The protagonist's work in a security-conscious military organization means that he's used to activity that is strongly intelligence-driven.  Once we begin to understand that all the information he has is doubtful – or  subject to limitations that impair its utility – we see that for all his personal power the protagonist is blind, unable to achieve his goals, because he needs credible intelligence on which to act.

Another theme is reason over passion.  Professional calm is presented as the only way to obtain useful results from violence; an antagonist demands impassioned indulgence of bloodthirsty urges as the price of physical power, creating an ongoing conflict.  Myke Cole illustrates the futility of seeking balance in a series of conflicts engineered to demonstrate that without care and control, violence has no utility at all to a civilized person.

More themes appear, but why spoil the story?

By planting numerous themes early and carrying them throughout the work, Myke Cole ensures the reader understand the problems they pose when they entangle the protagonist and complicate his conflicts. The result is conflict with more than the merely-physical dimension, and resolutions readers can care about.  This is a book well done.

Protagonist and Adversity
Gemini Cell is the story of Jim Schweitzer, a Navy SEAL who doesn't expect to star in a mashup between Revenge of the Ninja and Frankenstein mixed with a dose of Ghost.  From the back-cover copy, we know Schweitzer is going to bite it – and soon.  So we are kind of at the edge of our seats from the outset, expecting him to die at any moment, but hoping he'll manage to come out okay despite everything.

The story opens in an art gallery where Schweitzer wants to support his wife Sarah as she advances a few big steps in her dream career as a visual artist.  He knows Sarah expects him to flake out over work, and he assures her he's good for the night.  He really wants it to be true, too.  You know how this scene ends already, don't you?  It helps define Schweitzer, to ground him in a world that's larger than his job, and to establish both his values and the priorities with which he grapples.

Jim Schweitzer's plot arc in Gemini Cell may be complicated by his unexpected career as an unkillable (being already dead) special forces operator, but it's largely his confrontation of the first-scene conflict writ large: he wants to do right by his family – but since his death, his job's demands have only grown worse.  His desire to make good on his role as a father and husband is so obviously doomed (the "why" risks spoilers), but you can't help rooting for him – just as you hoped he'd manage to cheat the death promised on the back cover, even if just for another page or two.

Of course, questions overhang – how, exactly, did Jim get into this mess in the first place?  There's more to learn, and you can expect future volumes to satisfy hunger for answers.

Other Characters
The story isn't all Jim Schweitzer, or testosterone-drenched white men gunning down whole armies by one-handing belt-fed machine guns whose ammo chains never shorten.  Scenes cut between plotlines about Jim, and about people wondering what has become of Jim.  The supporting cast includes people who seem by the close of the book to be mostly good, and some whom we might be persuaded have become treacherous bad backstabbers fueled secretly by cackling villainy in an IV bag.  And they're not all male: Sarah proves to be a badass in her own right, and Jim's immediately-senior NCO is a Chief Petty Officer who boards target vessels with her team and shoots as effectively as she commands.  Techs in the unit Jim lands in after his re-animation are a co-ed lot, and guards appear in both genders.  Names and physical descriptions paint a full-color world with multiple nationalities and racial backgrounds.  Jim's best friend is Asian.

The supporting cast isn't just a cheering section or a mook squad.  Repeatedly Jim finds himself in positions in which his ability to act effectively turns on support from others.  It's not an ensemble cast, of course;  the story really is about Jim Schweitzer.  But it's not Conan – and in the twenty-first century, that's a good thing.

Darkness
As in prior Myke Cole books, Gemini Cell includes a lot of conflict that starts close to the heart.  Tension isn't presented purely by targets:  characters suffer internal conflicts, trouble with work, concern about information that's withheld from further up the chain of command, known and unknown betrayals by people in positions of trust or authority, and more.  Jim depends on his unit to support him following his re-animation, but can he trust what its spokespeople tell him?  The whole scale of revealed and suggested conflicts risks spoilers, but the fact the good guys live in a world of iffy intelligence and dubious loyalty makes the place a lot darker than military thrillers that focus more on the gung-ho aspect of unfolding neat military plans on an unprepared opponent, or manly men outnumbered and surrounded but fighting their way to victory with their backs to wall.

There are unprepared targets in Gemini Cell, of course … but are they all bad guys?  How would the good guys ever learn?  The book hits a few times on the ambiguous position of good guys who act (with finality) on information they know is incomplete.  They trust the information, and the instruction to shoot, even without the means to tell independently what treatment best suits each target.  This invites interesting questions.  What if the wrong people ended up in charge of the unit?  (Either one, really: the one he started in, or the one into which he was re-animated….)

Are the wrong people in charge already?

Well.  We'll see.  I hear the next one's called Javelin Rain.

Craftsmanship
On social media and in interviews, Myke Cole has revealed that he is not a seat-of-the-pants writer, but meticulously plans his stories and subjects his manuscripts to a grueling edit process that yields multiple successive drafts.  From his comments, it's clear the process is painful.  But from this end of the product pipeline, I can say this: it's worth it.

Cole knows where his protagonist must go and what mysteries he must unravel, so with careful planning he is able in this volume to set up and solve a one-book problem while laying the groundwork for the protagonist to advance into bigger problems that require the first volume's knowledge to solve.  There's no question that Cole's grueling production process yields a better-designed, better-paced work of fiction than one can expect to get from a less rigorous process.  For an example of another author who relies on a demanding planning process to engineer reliably outstanding stories, book after book, without painting himself into a corner or writing duds, consider Jim Butcher, author of the 6-volume fantasy series Codex Alera and the still-in-progress-after-fifteen-volumes Dresden Files series.  Jim Butcher's praises have been sung here since 2008.  It's about the craft.  Butcher's success proves rigorous process works, even after dozens of books, and Cole's universe is a wonderful place to see the result of this technique on display.  It's hard work, but Cole understands it's necessary.  And he's out there right now, hard at work on the next volume, suffering for your amusement.

Readers: you're in good hands with Myke Cole.

Conclusion
Cole's universe is populated by characters with interesting internal and external conflicts that are easy to get interested in seeing resolved.  People who worry about picking up a series' first book out of cliffhanger-dissatisfaction concerns need not worry.  Gemini Cell closes the story arc on which it opens, and it feels done when it closes.  Sure, the characters identify some doorways for later books to breach, but rather than detract from the work this builds anticipation for the character’s development.  The climax puts Jim to the question he's needed to answer from the first chapter, and sets him on the path to solve the problems he's unearthed on the way.  It’s a good day.

And it's fun.  After the initial anticipation to see the back-cover discussion of Jim's death play out – turns out, he’s tough to kill – readers enjoy a long sequence in which the action and suspense in the two main plot threads make the book hard to put it down until the end stands in sight.  Unless you enjoy losing sleep, pick it up early in the day.  You've been warned.

Myke Cole’s Gemini Cell offers an exciting story about a new character with a novel superpower-problem, set in a universe he's had three other books to understand fully enough to embed a mystery that will take another couple of books to solve.  I look forward to those books – and so will you.

(For those interested in an interview with Myke Cole, try this one, on which the author says, "I love new and unusual questions."  Also, his mother read it and said, "What a great interview!"  So read it, already.)