Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of DryShips plunged as much as 13% yesterday, and hit new 52-week lows following share price weakness from its majority-owned Ocean Rig UDW subsidiary, further decline in dry shipping rates, and marketwide concern about the global economy.

So what: As stated in my previous article, DryShips owns approximately 78.3 million shares of Ocean Rig. When Ocean Rig goes down in market value, the stock asset value of DryShips also goes down considerably. Ocean Rig is in the drilling business, and oil prices are getting killed along with it. Cheap oil doesn't help the situation, either, because if oil gets a lot cheaper, deepwater drilling projects may become less -- or not at all -- economical for customers. Drilling companies may opt for other land-based projects.

Meanwhile, the dry shipping market, as measured by the Baltic Dry Index, or BDI, continues to get pulverized, down another 1.7% yesterday after falling 2.4% Wednesday. As a reminder, the BDI measures change in the daily spot rates based on a basket of various ships and routes and continues to be significantly lower than this time last year by well over 50% for both the Capesize ships and the Panamax ships. Investors were expecting at least a seasonal rally in shipping rates by now on top of expecting a high-demand/low-supply situation. So far we're witnessing none of this.

Now what: How much lower can shipping rates go? Many dry shipping companies aren't even able to break even on results with rates this low. If this continues, expect to see new-build orders get canceled, which will be helpful in the long term for the industry. Older ships that are more expensive to use due to inferior fuel economy and higher maintenance may finally start to be scrapped and taken out of the world fleet.

Monitor oil prices, because not only do they hurt Ocean Rig but they further expand the world fleet of ships. Cheaper fuel means ships can move faster and make more trips in a month, thus expanding the world supply even further. On top of that issue, according to an article by East Asia Forum, "A less acknowledged consequence of China's emergence is the transformation of incentive structures in the global shipping market."

China has banned the docking of the Valemax ships, which are about double the size of the Capesize ships. This puts shipping in Australia's favor as opposed to Brazil's. The consequence is that since the route from Australia to China is half the shipping distance as to Brazil, far less shipping supply is absorbed. The report also notes: "It is testament to China's weight in global markets that a unilateral move by one Chinese interest group could have such destabilising consequences. The blocking of the Valemax was the result of the fragmentation of China's iron ore industry, and the [hijacking] of policy-making by a particular interest group, against broader national priorities."

This highlights just how risky the dry shipping market is in general from a fundamental basis as well as how sensitive to and dependent on China's demand the industry is. Issues like this are well beyond anybody's control and leave much of the industry at the mercy of China these days.

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

Once again, Seadrill stock is getting crushed, falling as much as 8% in today's trading. And, once again, the major drop doesn't correspond with a fall in earnings or any other company-specific news. Instead, it's a move driven by macro events and fear that they'll hurt earnings in the future. Here's how I think you should look at Seadrill now.

What's driving Seadrill lower
Like it or not, what's driving Seadrill in the short term is the price of oil. You can see below that the recent sell-off has corresponded closely with the fall in oil prices.

Brent Crude Oil Spot Price data by YCharts

For traders, the logic isn't completely flawed, it's just very short-sighted. If oil prices remain where they are today, or even fall further, it's likely that demand for offshore drilling rigs will wane, and dayrates and profits will suffer in the future.

But let's be clear that Seadrill's earnings haven't been bad so far in 2014, and there's still plenty to like in the company now and in the future.

Seadrill's offshore jack-up rig Offshore Defender. Image source: Seadrill.

So what should you do about it?
The reason I think the stock's drop recently is overdone is because it's overlooking the fact that Seadrill has one of the newest fleets in the industry and has long-term contracts for most of that fleet. The floaters Seadrill owns have 96% contract coverage for the remainder of this year, 80% next year, and 62% in 2016. In short, short-term oil price movements have little to do with the company's long-term earnings.

With that said, if oil prices remain low for the next few years then there's a lot to be worried about. But I don't think oil will stay low for long because big oil has already started to cut back on capital spending, and smaller shale producers need to have high prices to remain profitable.

The short-term picture looks bleak if you're looking just at oil prices but long-term Seadrill is in a strong strategic position if oil prices recover.

What to do now
The big question is whether you should be a buyer or seller of Seadrill stock today. It may be tough to stomach, but I think this is a time to buy because oil prices will rise long-term, and Seadrill is well positioned for long-term growth in the offshore market.

Even founder John Fredriksen gave investors an indication that he's in for the long haul by recently buying 2 million more shares of the stock.

Days like today can be tough to watch, but it's key to take a long-term approach to stocks like Seadrill. It has a lot going for it as long as oil prices recover in the next year or two. In the meantime, there's high contract coverage for the company's rigs, which will keep revenue coming, and management has flexibility in financing new rigs with its Seadrill Partners subsidiary.

The upside is just too high for Seadrill to be a sell now. There could be further downside, but I think the risk/reward is in investors' favor after the recent drop. But be prepared for volatility, because energy markets are moving dramatically everyday right now and often for no reason. That's unnerving, but it's also when long-term investors can make a fortune.

Apple software chief Craig Federighi announces HomeKit at WWDC 2014. Source: Apple

The "smart home" trend is still in its early stages. As part of the broader Internet of Things trend, connected appliances are here to stay. Currently, a mere 4% of consumers own connected smart-home appliances, but 30% of consumers plan to purchase a smart home device within the next two years.

Here's how Apple can revolutionize the smart home and catalyze mainstream adoption.

Where the smart home is now
Right now, there is no universal standard for smart appliances. A wide range of products exists, each with its own set of proprietary protocols, interfaces, and apps to control the devices. Device makers all have a vested interest in promoting their own protocols in the hopes of creating consumer lock-in.

The first wave of smart appliances with obvious use cases will include things like smart lighting, such as Philips Hue or Belkin WeMo Smart LED bulbs, and smart thermostats, such as Google's Nest. Belkin WeMo is a prime example of a manufacturer attempting to create a proprietary platform, offering a slew of Belkin devices under one umbrella. For what it's worth, Belkin has inked partnerships with other manufacturers in order to support their devices as well, broadening the potential appeal of WeMo.

Belkin WeMo. Source: Belkin

As smart devices proliferate, the market risks severe fragmentation and segmentation, as each company attempts to claim its own portion of the smart home for itself. Imagine in a few years having a dozen connected appliances, each with its own separate app, set of protocols, and varying levels of compatibility, security, support, and interconnectivity with other appliances.

Other companies like SmartThings, Z-Wave, or ZigBee are attempting to create smart-home platforms. SmartThings and ZigBee offer open standards, while Z-Wave is playing the proprietary card. Each of these companies hopes to offer protocols and standards for the industry to adopt, which would help mitigate the fragmentation risk. But you've probably never heard of any of them.

Where the smart home is going
What these companies lack is the sheer scale to create a mainstream, cohesive platform that facilitates interconnectivity and interoperability between all smart appliances. That's where Apple comes in with HomeKit.

With an iOS installed user base in the hundreds of millions, Apple brings immense global scale to the table, and offers manufacturers a strong incentive to adopt its protocols, even if they are proprietary. This is precisely what the industry needs to truly move forward.

Additionally, since Apple has no interest in actually creating appliances like smart garage-door openers or smart door locks, it won't be competing directly with manufacturers. Apple will offer manufacturers access to its massive user base while sitting on the sidelines of competition. That's a compelling pitch for a smart-appliance manufacturer.

The smart home needs to be smarter
Once upon a time, Steve Jobs envisioned the Mac as a digital hub for your digital life. While the company moved away from this strategy in favor of the cloud, it could use a similar strategy for the smart home with Apple TV. Apple's latest beta software for Apple TV hints that the company's set-top box will be used as a remote access peer, serving as a smart-home hub. That would resemble SmartThings -- a company Samsung is reportedly looking to acquire -- , which also sells a $99 hub that ties its platform together.

Adding this functionality to Apple TV could be the extent of Apple's direct revenue opportunity, but Apple would still benefit in the form of broadening and strengthening its overall ecosystem. Manufacturers and consumers benefit by having a unified platform to rally behind.

Apple could finally make the smart home smart.

HTC just unveiled the HTC Desire Eye, an unusual "selfie" phone equipped with the most powerful front-facing camera ever.

The 5.2-inch phone has two 13-megapixel cameras -- one on the front and one on the back -- and is powered by the same quad-core Snapdragon 801 processor and 2GB of RAM as the flagship One M8. However, the Desire Eye has a plastic body, instead of the M8's metal chassis, is waterproof in three feet of water, and comes in a wider variety of colors -- white, red, and blue.

Source: HTC.

The Desire Eye will also be the launch platform for the HTC Eye Experience, a face-tracking feature which HTC states will keep up to four faces "perfectly framed at all times" for photos. Other interesting additions to the device include a "double selfie" to simultaneously photograph a user and the landscape, a "voice selfie" which lets a user take a picture by saying "say cheese", and a "crop me in" feature which merges the front image with the rear one -- which HTC claims will allow a user to take "more extreme" selfies.

The Desire Eye is notably branded as a mid-range device, although it has comparable specs to high-end devices like Samsung's Galaxy S5. HTC hasn't announced the release date or price for the Desire Eye, but PC Advisor expects it to launch for £300 to £400 ($484 to $645) in the U.K.

But despite HTC's repeated use of the word "selfie" to generate buzz for the Desire Eye, investors are probably wondering if this phone will finally break HTC's losing streak in smartphones, or quickly be forgotten?

The business of the selfie phone
To understand why we're suddenly seeing "selfie phones", "selfie sombreros", "selfie drones", and even a new ABC TV show called Selfie, we should take a look at search interest in the term from January 2013 until now, according to Google Trends:

Source: Google Trends.

Therefore, slapping "selfie" on products would be a natural marketing move, but is there any proof that calling a device a "selfie phone" will boost sales?

I seriously doubt it. Apple's iPhone 6, which sold 10 million units in three days, has an underwhelming 1.2-megapixel front-facing camera. Its main rival, Samsung's Galaxy Note 4, has a 3.7-megapixel one. Together, Apple and Samsung control 37% of the world's smartphone market, according to IDC, and they did so without massive front-facing cameras.

But Microsoft , which only controls 2.5% of that market, believes in "selfie phones" as much as HTC. Microsoft recently promoted its new mid-range Lumia 735 as a selfie phone, highlighting its 5-megapixel front-facing camera with a wide-angle lens. Sony , another industry laggard which only controls 2% to 5% of the market, has also launched a selfie phone called the Xperia C3, which is also equipped with a wide-angle, 5-megapixel front-facing camera. The Lumia 735 will cost around $288, based on its European launch price, while the C3 costs around $300 in India.

It's fairly obvious that HTC, Microsoft, and Sony's sudden interest in selfie phones is a desperate attempt to get their devices noticed by piggybacking on a hot search term. But getting noticed in today's saturated smartphone market is really half the battle  -- since the premium market is controlled by Apple and Samsung, while the mid to low-end market is being gobbled up by Chinese rivals like Xiaomi.

Understanding HTC's woes
If Microsoft and Sony's selfie phones fail, their core businesses will survive, since they are both well diversified beyond smartphones. HTC, on the other hand, relies completely on smartphone sales.

Over the past three years, HTC's market share in smartphones fell from 9.3% to 2.5%, according to Gartner. Competition from Samsung and Chinese competitors, poor marketing decisions, product delays, and several high profile executive departures all exacerbated that decline. Between fiscal 2011 and 2013, the company's annual revenue plunged 56% from NT$465.8 billion ($15.45 billion) to NT$203.4 billion ($6.75 billion).

Last quarter, HTC's revenue fell 11% year-over-year to NT$41.9 billion ($1.38 billion). On the bright side, its posted a profit of NT$640 million ($21 million) -- mainly due to cost-cutting measures and one-time gains -- topping Bloomberg analyst expectations of NT$501.6 million ($16.5 million).

A Foolish final thought
Since revenue growth is clearly HTC's main problem, the company is using a scattergun approach to find new sources of growth beyond smartphones. The company recently unveiled the Re action camera, will launch the Nexus 9 tablet this month, and plans to sell a smartwatch next year. Of these efforts, the Nexus 9 is the most promising, since its Google branding should help it sell better than the company's previous tablets, the Flyer and Jetstream.

The Nexus 9. Source: Google.

However, the Desire Eye won't move the needle when it comes to smartphone sales. It's too similar to the HTC One M8, costs more than the Lumia 735 and Xperia C3, and its only notable advantage over comparable devices is its 13-megapixel front camera. In my opinion, people like to take selfies -- but not enough to buy phones specifically designed for that purpose.

Which country invested the most in clean energy last year? Believe it or not, it was China -- by a wide margin. Of course the country also happens to hold the lead position in carbon emissions as well. It may look like the Chinese government is trying to clean up its environmental act, but don't be fooled. China's supposed clean energy shift won't do much to change the global warming picture.

Money where its mouth is
China has made overtures about cleaning up its act, pollution-wise, for some time. That's partly because its own citizens are upset that they can't breathe the air. This fact is directly related to large particle emissions from coal burned without the scrubbing technology we have installed across much of the U.S. coal fleet. As for carbon dioxide, well, that's less pressing than breathing, but still on China's mind to some degree.

(Source: Fredrik Rubensson, via Wikimedia Commons)

China spent over $54 billion last year on clean energy. That's nearly 50% more than what the United States spent. China installed 14 gigawatts' worth of wind power and 12 gigawatts of solar, versus less than 1 gigawatt of wind and 4.3 gigawatts of solar installed in the United States. Clearly, China is putting its money where its mouth is as it attempts to clean its environmental footprint.

And the impact is quite real. Through the first half of this year, Greenpeace estimates that coal use in the country has declined for the first time since the turn of the century. That's huge, because the country's coal use roughly doubled over the past ten years. Which, of course, is a big reason why it's hard to breathe in some Chinese cities and why the country leads the world in carbon dioxide emissions.

Don't get too excited
From an environmental standpoint, this is great news. China is taking a different tack toward sating its massive power needs. But it isn't the end of the story. Coal supplies around 70% of China's power. That's not going to change overnight -- it's simply impossible to replace that much of the pie without causing calamitous problems.

And then there's the demographics of the situation. China emits roughly half as much carbon dioxide per person as the United States, but more overall because its population is about four times as large. And that's the big problem. China's coal consumption increased so rapidly because it was building cheap coal power to facilitate its economic growth, pulling up the living standard of its citizens.

(Source: taylorandayumi, via Wikimedia Commons)

The big change has been China's shift from rural to urban living. Building and powering cities requires a huge amount of electricity. According to the CIA World Factbook (2011 data), about half of China's population lives in cities. But that's still well behind more developed countries. About 82% of U.S. citizens live in urban locales, for example. And the big-city migration in China is expected to keep going, at more than twice the growth rate that U.S. cities are expected to see. This is why companies like Peabody Energy , Rio Tinto , and BHP Billiton still see China as a positive catalyst for their coal operations.

Essentially, China needs more power. Cutting out coal isn't a viable option when you have to keep upping total electric output at the same time. The drop in coal use shows that China is getting more creative with its efforts -- for example, trying to shift more toward natural gas. However, that's just a less dirty carbon fuel. And it just inked a deal with Russia that will have Russia building coal power plants to service the Chinese market, essentially getting someone else to do the "dirty" work.

The survivor
But coal isn't going away, nor are other carbon-based fuels. China is investing heavily in power, not renewable power. That's different than what's taking place in the United States, where renewable power is displacing dirtier options. In fact, China is still building coal power plants.

Even if China stopped building new coal plants, the relatively new coal plants the country has put up over the last decade or so aren't going to be mothballed -- which means they'll keep spewing carbon dioxide even as other, less dirty options are built. And while total coal consumption under an unrealistic no-more-coal plan could fall slightly as older power plants and steel mills shut, it won't be nearly enough to have a material impact on China's current carbon footprint, which is still being driven by economic growth and urbanization.

Look! Up in the sky! Is it a bird? Is it a plane?

No. It's a blimp. And according to Raytheon , it's just what America needs to protect the nation's capital from high-tech threats in the 21st century.

Photo: Raytheon..

At $2.8 billion and 20 years in the making, Raytheon's "JLENS" program will receive its first trial run this fall, when a pair of aerostats (think of the Goodyear blimp, but tethered to the ground by a cable, and stationary) rise over the U.S. Army's Aberdeen Proving Ground in Maryland. There, floated up to a vantage point 10,000 feet in the sky, these blimps will deploy powerful radars capable of seeing out 340 miles in every direction -- and protecting everything under their aegis from hostile attack.

But back up a step. Let's begin at the beginning, with a quick review of what JLENS is.

What exactly is JLENS?
Sometime in the 1990s, as the U.S. Congress began cutting defense spending in an attempt to claim a "peace dividend" after the Cold War's end, the Pentagon began thinking of ways to provide constant aerial surveillance of the homeland, but at something less than the cost of 24-hour aerial patrols by expensive AWACS surveillance planes.

What they came up with was a play on Civil War-era artillery observation balloons. Specifically, hydrogen-filled blimps, tethered to the ground along the U.S. coast, and equipped with radar so as to permit them to see far out to sea. Such "aerostats," as the tethered blimps are known, would be cheaper to operate, and able to remain aloft far longer than jet fuel-hungry airplanes. They'd also be cheaper to build and launch, and easier to repair and upgrade, than spy satellites. And being located closer to Earth, aerostats could instantly communicate what they see to terrestrial air defense systems, such as Patriot and Standard Missile 6 missile batteries on the ground, or AMRAAM-armed fighter aircraft in the air.

JLENS takes all of these ideas and puts them into practice in the form of pairs of 80-yard-long aerostats, tethered in place by cables containing power lines to operate their radars, and fiber optic cables to transmit missile targeting data directly to air defense units at light-speed. Each aerostat can remain aloft for 30 days (or more) at a time. After 30 days, they can be reeled back down to Earth for maintenance and topping off of hydrogen supplies in a few hours' time -- and then sent right back to work.

Each two-aerostat team is termed an "orbit" and includes one aerostat housing a surveillance radar for detecting potential threats. The second aerostat contains a fire control radar that can lock on to any particular incoming object deemed a threat, and guide air defense systems to intercept it.

The net effect: A two-aerostat orbit, says Raytheon, can provide AWACS-level aerial surveillance at less than one-fifth the cost of keeping five AWACS airborne 24/7.

What's new with JLENS?
Many defense contractors have worked on prototype aerostat projects for the U.S. government over the ensuing years. Lockheed Martin , for example, has several aerostats operational along the U.S.-Mexico border, engaged primarily in anti-drug-smuggling operations. Raytheon's system, in contrast, is designed to detect existential threats from "airplanes, drones, and cruise missiles." The system is said to be able to detect "boats, mobile missile launchers, and tanks," and "tactical ballistic missiles and large-caliber rockets" as well.

Lockheed Martin's TARS aerostat. Photo: Lockheed Martin.

How well JLENS performs this mission is what the Army will be testing at Aberdeen, as it deploys JLENS to provide air security for the White House and its environs over the next three years. (From Aberdeen to 1600 Pennsylvania Avenue is a trip of just 70 miles -- well within JLENS's range). After the trial ends, the Pentagon plans to analyze the performance data collected, and determine whether JLENS is as effective, and as cost-effective, as promised.

What it means to investors
If the Pentagon comes to a positive conclusion, it may proceed with initial plans to build and deploy as many as 16 JLENS "orbits," or 32 blimps. That could be a significant revenue opportunity for Raytheon.

Why? Congress is currently debating whether to fully fund the first trial orbit of JLENS at $54 million per year. In Pentagon terms, that's not much -- there's probably $54 million in loose change rattling around between seat cushions in Pentagon sofas. But if Aberdeen's JLENS is a success, justifying putting all 16 initially planned orbits into operation, well, that could mean as much as $864 million in annual revenues for Raytheon.

That's almost enough to reach the $1 billion level at which we begin talking about "real money" in Washington.

On March 29, 1973, the U.S. declared an end to the Vietnam War, withdrawing the last American "combat soldiers" from South Vietnam. Forty-one years later, it looks like we're going back.

Last week, the U.S. State Department confirmed that the United States will resume sale of military weapons to Vietnam. They specifically denied that the move is related to reports of increased military threats to Vietnam at the hands of the Chinese Navy, referencing instead the Vietnamese government's improved record on human rights, and alluding to China only by mentioning unspecified "U.S. security interests."

China has "interests" in Vietnam, as well. Seen here -- China's famous "nine-dash line," which claims as China's exclusive province nearly all of the South China Sea, including waters arguably belonging to Vietnam and the Philippines. Illustration: Wikimedia Commons.

This past summer saw multiple incidents of Chinese warships and commercial fishing vessels skirmishing with Vietnamese boats in the South China Sea, battling for position around a Chinese oil rig that's been set up within Vietnam's exclusive economic zone. In one notable incident, a Chinese vessel rammed, and sank, a Vietnamese fishing boat. (The sailors were rescued by other Vietnamese boats nearby, but the incident escalated hostilities nonetheless.)

Now, according to combined reports from ABC News and DefenseNews.com, we learn that at the same time as China is raising the temperature on territorial disputes in the South China Sea, the U.S. may begin selling Vietnam "maritime security assets." This, says DN, could include everything "from prop planes like the A-29 Super Tucano" (jointly manufactured by America's Sierra Nevada Corp and Brazil's Embraer) to Boeing's "large P-8 maritime surveillance aircraft."

Boeing's P-8 Poseidon. If it looks a lot like a militarized 737... that's because it is. Photo: Flickr.

ABC adds that boats such as the five fast patrol boats provided to Vietnam under an $18 million aid package late last year -- unarmed, as the ban on weapons sales had not then been lifted -- could also be offered to Vietnam, should it be inclined to buy them.

Vietnam -- it's got potential
DN notes that, as of this moment, Vietnam "does not have any equipment on order." But with news of the State Department's new policy only a week old, that could change quickly. And with Vietnam sporting an annual military budget of anywhere from $3.4 billion to $4 billion, this is not an insignificant opportunity for U.S. defense contractors.

It's probably not too early for investors to keep an eye on this part of the world -- where spending on naval forces could reach $200 billion during the next two decades -- to begin considering the possibilities of which companies could benefit from a resumption of U.S. arms sales to Vietnam. So let's do that.

Who benefits?
In the air, the two most obvious candidates to benefit for Vietnamese arms buying for maritime security are the two firms that DN has already highlighted -- Boeing, which makes Poseidon, arguably the world's most advanced maritime patrol aircraft, and Embraer/Sierra Nevada, which builds the Super Tucano prop-driven fighter plane -- bargain-priced for countries with sub-$10 billion defense budgets.

A third alternative to consider, though, is Textron , which has developed a faster, and possibly even cheaper, Super Tucano alternative in the form of its TextronAirLand Scorpion fighter jet.

Textron's Scorpion is still in search of its first buyer. Will Vietnam make a bid? Photo: Textron.

And, of course, you can't forget Sikorsky, whose Seahawks (and their Black Hawk analogs) are preferred maritime patrol helicopters around the world.

In the U.S. and around the world, Black Hawks and Seahawks are the world's No. 1 most popular military helicopter model. Photo: Wikimedia Commons.

Meanwhile, in the water, the most likely U.S. contenders for Vietnamese military sales are probably, in order, privately held Bollinger Shipyards, which builds small Cyclone-class patrol coastal vessels for the U.S. Navy, Huntington Ingalls , the Coast Guard's go-to source for coastal "cutters," and Lockheed Martin , which, along with Australia's Austal, builds Littoral Combat Ships for the U.S. Navy ("littoral" being just the place where Vietnam has been having so many conflicts with China of late).

Which of these companies will ultimately win defense contracts to help Vietnam arm up and defend its coastal waters? Only time will tell. But now, at least, now you've got a list of "likely suspects" to keep an eye on.

Courtesy of Apple.club.tw, a picture the Apple  iPad Air 2 logic board -- which houses crucial components of the iPad such as its processor and memory -- is now publicly available for all to see. This gives us some insight into some of the key technical specifications of Apple's next generation iPad, which actually matters a lot more than one might initially think.

Unlike most of its competitors, Apple doesn't play the "spec game" just for fun; adding more expensive hardware hurts Apple's gross profit margins. So, if a next-generation iPad uses more components or more expensive components than its predecessor, then Apple likely has a really good user-experience focused justification for doing so.

While the logic board leak doesn't tell us everything that we want to know, it does give us a couple of crucial bits of information.

More RAM, finally
The first upgrade, according to Apple.club.tw, is that the iPad Air 2 will feature 2 gigabytes of RAM. This represents a doubling of the memory over the prior generation iPad Air, and the most RAM that has ever been included in an iOS device.

Apple has been criticized for putting "only" 1 gigabyte of memory on its devices, particularly as Android devices routinely ship with 2 gigabytes or more.

However, if Apple is going ahead and including more memory (which bumps up its cost structure on the device by at least $8.30, per the Mobile DRAM contract price numbers reported by TrendForce ), then Apple likely sees a user-experience related reason to include more memory. Perhaps that rumor about the next iPad including split-screen multitasking (courtesy of 9to5Mac ), which could dramatically increase memory requirements, is true?

Apple A8X chip
It had been previously rumored that Apple would equip its next iPads with an A8X chip. Traditionally speaking, the "X" variants of Apple's processors would include significantly more graphics horsepower, and in order to service that extra horsepower, more memory bandwidth. The "X" chips have also tended to include slightly faster CPUs.

Thanks to MacRumors forum member primordian , it is now clear that the logic board shown includes an A8X processor rather than a straight up A8 chip.

Earlier this month, I speculated that for such an A8X chip, Apple would likely include an Imagination PowerVR GX6650 GPU, which would represent a pretty significant step up from the graphics processor found inside of the A8 (the GX6450). I also expect that Apple will boost the CPU clock speed modestly, in-line with historical trends.

It will be very interesting to see what other improvements that Apple ultimately made in the A8X over the A8.

iPad margins will probably go down
The good news is that the new iPads will probably offer a pretty compelling user experience improvement over the prior generation models. The bad news, though, is that they'll be a bit more expensive to make than their predecessor.

In particular the A8X chip is likely to be more expensive to make than the A7 found in the current iPad Air. Adding an additional gigabyte of memory won't be cheap, either. The Apple.club.tw leaks also suggest that the new iPad will include Touch ID.

I expect gross margins for the iPad Air to go down, particularly as I doubt Apple will be able to command higher prices for the new Air over the prior one. However, if this model can rejuvenate iPad sales and drive meaningful, and more sustained, year-over-year growth across the year, then the higher cost structure is likely to be more than offset by higher unit volumes.

Foolish thoughts
While the spotlight seems to be on Apple's new-and-improved iPhones, there's a good chance that if Apple can deliver a differentiated and more feature-rich experience with its next generation iPads, Apple can limit the widely expected cannibalization that large screen iPhones would have on iPads.

The improved spec won't be enough to drive increased sales, but if Apple can use that extra hardware to deliver meaningfully new user experiences, it may yet convince customers that now is the time to buy a new iPad.

Source: Brewers Association.

The old adage states that "nothing goes up forever," but the craft beer industry would prefer to have you think otherwise.

Since the late 1970s, microbreweries have been popping up like weeds across the country, with some eventually blooming into national brewers. In fact, the number of breweries in the U.S. has exploded from just 89 in the late 1970s to 2,538 as of 2013, according to the Brewers Association. At the current double-digit growth rate, we may have more than 6,500 breweries in this country by 2025.

With this rapid rise in craft beer interest, it has to be asked whether this growth is sustainable, or if we're entering a "craft beer bubble."

Admittedly, I'm a big fan of craft beer -- you know, the type of connoisseur that drinks his beer out of the proper glassware and takes notes while trying to decipher the type of hops used or the various flavor notes on my palate. But, I also don't work in the beer industry, so my knowledge of its innerworkings are limited to what I can read in an annual report or a conference call. In order to get a true feel for the threats facing the craft beer industry, I turned to RateBeer founder and CEO Joseph Tucker to provide his insight into the matter.

Craft beer's three biggest threats
Tucker's website allows users to rate tens of thousands of beers based on a number of criteria such as aroma, taste, and appearance to help weed out hidden gem brewers, while also proving to be an excellent breeding ground for the exchange of beer industry knowledge. In other words, he was the perfect person to pose the following question:

"What are the three biggest challenges currently facing the craft beer industry?"

Here's what Tucker had to say:

No. 1: Getting swallowed by "Big Beer"

I don't think Big Beer "figuring it out" with either strategic acquisitions or emulating craft brands will be a significant factor in cooling down the still exploding craft sector. While brands like Blue Moon and Shock Top have enjoyed success, Big Beer continues to be hit where it hurts -- their flagships. 

We're already seeing greater advantages for the craft sector at the distribution, retail, policy, and lending levels -- and now tougher than ever for Big Beer to push the genie back into the bottle. Craft is here for the long term. It's simply much easier to be in the beer business today than it was 10 years ago.

Source: Flickr user Jhong Dizon.

Tucker hits a on a key point here with the threat that bigger breweries bring to the craft scene: their deeper pockets. Anheuser-Busch InBev , for example, purchased Goose Island in 2011 and Blue Point Brewing earlier this year in order to capitalize on the rapidly growing craft beer movement.

However, deeper pockets won't necessarily mean more market share for larger brewers, even if their money could be used to quickly ramp up distribution that these acquired craft brewers had previously lacked. Beer drinkers have increasingly shown that they're willing to pay a premium price for quality beer. Simply put, if big breweries focus too much of their attention on acquiring or developing craft beer brands, they could risk alienating their core, high-margin products, which would be bad news for these companies over the long run.

No. 2: Becoming watered down by naive new brewers

[The] ease of getting into the craft beer business is its greatest weakness.

The last hit to the market, taken in the late 1990s and lasting until 2005, was mainly due to an over exuberance by newcomers who saw opportunities in what was then called "microbrewing," but didn't have the market knowledge to produce lasting success. Too many got into the business focusing on how to make money instead of on how to make a great product. It was small beer's success that attracted those who hurt the entire market.

The consumers couldn't count on a better product and many of those coming in found a crowded market with increased pressure from Big Beer. Many of the bandwagon microbrewers, who were downloading recipes off the Internet, went out of business and eventually banks became more wary of lending to small brewers, policy liberalization died, consumers drifted and eventually the tide turned. 

We're unfortunately seeing a similar environment now, where many new naive brewers are entering the market not understanding some of the bigger basics -- product differentiation, distribution, quality control, location. And more similarly to the late 1990s, I've heard just as many newcomers talk about passé ideas such as market share and flagships with little inkling about the details of popular styles that today's more beer savvy consumers demand -- you can't have the business right and the product wrong. We're already seeing some increased churn where the overall number of brewers is still rising rapidly but the rate of closures has also increased somewhat. Increased natural churn will be the new normal for a while.

Source: Flickr user Hans Splinter.

Tucker's point hits on the main lure of craft beer: the intrigue of its exclusivity. It's exciting to be able to taste something that few people have tried, or that can't be had in every grocery store. It's also a thrill to examine the nuances in taste, appearance and aroma, for instance, from what's becoming a large number of breweries.

But the problem becomes this: At what point is the industry so watered down with unqualified brewers that it begins to detract from the intrigue of craft brewing?

Between 2006 and 2012, the amount of craft beer produced soared 71% to 13 million barrels as craft beer market share by dollar volume increased to 10.2% of the domestic beer market. However, as Tucker alluded to in his answer, more than 300 breweries closed their doors between 1996 and 2000 because of a mixture of undercapitalization and owners chasing returns in an industry they didn't quite understand. Based on craft beers' current growth projections, this shakeout could be on the precipice of repeating itself once again. 

No. 3: Losing the "craft" appeal

Additionally, the bigger craft brewers are becoming much stronger regional and national brewers, and some small brewers have complained that many of the unfair business practices associated with Big Beer are now being taken up by craft brewers filling their shoes. Sam Calagione, the owner of Dogfish Head, sees a "bloodbath" up ahead. A few successful craft brewers are out there aggressively taking tap handles, lobbying for newcomer-hostile policy, and abandoning the "coopetition" and "us Davids against them Goliaths" ethos that helped build the craft sector. It's craft beer eating its own young.

Lastly, Tucker makes the interesting point that it's possible for craft breweries to stop having that small-town feel and become too large for their own good -- essentially becoming Big Beer themselves. From a profitability standpoint, that may not be a bad thing, but it could alienate what had been a core customer as well as hurt the momentum of the craft beer movement.

Source: Flickr user Steven Guzzardi.

Perhaps the two companies that have to balance the struggle of sticking to their roots while also pushing the envelope across the U.S. are Boston Beer , the maker of Samuel Adams, and Craft Brew Alliance , the parent company of several craft brands, including Widmer Brothers, Redhook, and Kona.

Boston Beer has done an exceptional job of counteracting the loss of its small feel by having founder Jim Koch personally appearing in many of Sam Adams' commercials. Portraying a down-to-earth CEO making beer for those who want something more than what Big Beer is offering, Sam Adams and Boston Beer continue to find the mark year after year.

For Craft Brew Alliance, it's becoming increasingly tough to stick to its roots. Despite being self-labeled as an independent craft beer producer, Craft Brew Alliance's major shareholder, owning nearly one-third of its outstanding shares, is none other than Anheuser-Busch InBev. In other words, the bigger Craft Brew Alliance becomes, the more difficult it could be to retain its craft feel.

The sun is shining on craft beer
Obviously, craft beer is poised to face some challenges in the coming years if its current growth trajectory remains unchanged. But, in the words of Tucker, "The genie is out of the bottle. Consumers know good products. Governments know craft is better for employment and revenue. And the playing field is no longer hopelessly controlled by established multinational corporations. Good beer will prevail."

For the craft beer connoisseurs among you, as well as investors, this would be a welcome and bubbly forecast indeed.

This article was written by Oilprice.com, the leading provider of energy news in the world. Also check out these related articles:

• 
  
• The World's 10 Biggest Energy Gluttons

There is, to those of a somewhat romantic bent, an inherent beauty in financial markets.

Even just simple supply and demand has an appealing logic. As demand for a product increases, the price goes up, prompting an increase in supply, which in turn brings the price back down. When you look at the flow of money between countries and asset classes in a global sense, that tendency toward equilibrium becomes much more complex, but it is still the driving force of markets, with the same inherent self-correcting tendencies. Foreign exchange rates, interest rates in different countries, and stock prices around the world are all part of this complex dance, but in the modern, energy dependent world, the price of oil is arguably the most influential variable.

Oil, despite several different benchmarks such as Brent and WTI, is a commodity traded on a global market. While the value of a country's currency, or the interest rate its government must pay to borrow, can affect economic conditions in that country, fluctuations in the oil price affect us all. Whether we like it or not, oil is still the principal source of the world's energy, and pricing of the two next largest sources, coal and natural gas, are heavily influenced by the price of the black stuff. According to The International Energy Agency (IEA), those three accounted for over 80 percent of the world's energy supply in 2012. Lower oil prices, therefore, give a boost to the global economy, while a rapid rise can strangle growth.

The wide variations in the production cost of oil make it very sensitive to price swings. When costs vary as much as they do, from an average cost per barrel in the Middle East of $16.68 per barrel to offshore American oil that costs $51.60 per barrel to extract (again using IEA numbers), many wells can quickly become uneconomical when prices are volatile, leading to supply dropping. If demand and supply were the only thing that influenced the price, that would be manageable, but they are not.

Oil is priced in U.S. dollars, so the relative strength of the dollar also impacts the price. If the dollar gains in strength, it gains against everything, including commodities.

To simplify, if, as a starting point, one barrel of oil could be exchanged for $100 and then the dollar doubles in overall value, it would take two barrels to buy the same number of dollars. Dollars would have doubled in value and therefore the price of oil, as expressed in dollars, would halve.

The dollar's strength or weakness is influenced by many things, but one of the biggest is its status as a "safe haven" currency. When the economic outlook looks to be worsening, money around the world is used to buy the relative safety of U.S. dollars, and this is where the self-correcting beauty of markets comes in.

As the dollar strengthens, oil prices fall. Lower oil prices push down the cost of manufacturing and transporting goods, which in turn improves economic prospects around the globe. The reaction to worry has, at least in part, helped to alleviate that worry.

Increasing supply as the shale boom continues apace, combined with worries about global growth and the resultant strong dollar, can explain why, even with global tensions increasing, the price of oil has been falling. This is bad news for oil companies and their stockholders, but in the long run it will give a boost to the global economy.

When that happens, the whole process will reverse and the "invisible hand" that guides financial market will once again have done its job.

The Walt Disney Co.  has changed the way people use its theme parks through its FastPass+ reservation system. Now the theme park giant is testing a new use of the technology that could end the concept of waiting in line for rides while also opening up a significant potential source of revenue.

What is FastPass+?
The FastPass+ reservation system allows visitors to the various Disney parks to make reservations for popular rides, shows, and attractions as long as six months before their visit. Using the Disney website or the My Disney Experience app, future park visitors register their tickets, select which park they will be visiting on which date, then select from a variety of ride choices. In general, users get to pick one premium attraction and two less-popular ones. The FastPass+ system then gives them a number of different package choices by times where they will have a reserved one hour window to visit each ride.

For example, on my recent visit to Disney's Hollywood Studios in Orlando, I selected Toy Story Midway Mania as our premium attraction and was able to pick Star Tours (the Star Wars ride) and The Lights, Motors, Action! Extreme Stunt Show. At the Toy Story ride, this spared us an hour-long wait. At the stunt show the FastPass+ reservation got us better seating, and at Star Tours the system saved us a few minutes.

If the new system works it could radically alter the theme park experience for visitors to the various Disney parks. Instead of visits being a day-long process of riding what you want when you want, which can involve long waits, a park trip would become a planned, regimented experience. That fundamentally alters how people currently experience Disney World, Disney Land, and their various sister parks. It's a matter of trading spontaneity for not having to wait in long lines, which is something that could improve customer satisfaction.

"If visitors have to wait more than an hour, It almost doesn't matter how good the ride is -- they're upset," said John Gerner, founder of Leisure Business Advisors, in the The Orlando Sentinel.

FastPass+ can be used to ride Epcot Center's Spaceship Earth ride. Source: author 

FastPass+ test
Because lines for Toy Story Midway Mania are so long, Disney is conducting a multiday experiment where the ride is only available with a FastPass+ reservation. Standing in line won't be an option. Disney did this once before using FastPass+ as the only way to reserve a spot at a meet and greet from characters from Frozen at its Magic Kingdom park.

The positive of this system is that there won't be any long lines. The negative is that if you miss out on a reservation, you won't have a chance to experience the popular attraction. The system will also limit people's ability to ride a ride over and over.

"You're essentially making people reserve in advance and are taking away this really long line at the scene," Gerner told The Sentinel. "The trade-off is that people willing to wait six hours don't get to do so."

How can Disney profit off of this?
Disney's main theme park competition, Comcast's  Universal Studios, already makes money from a variation on the FastPass+ model. The parks sell something called Express Pass, which allows holders to skip the main line and wait in a much shorter line. The Universal Studios parks sell a number of variations of the pass -- some which allow one trip on every ride and others which allow unlimited visits -- but the revenue driver is how the passes are priced. Universal charges more for the pass on crowded days and less on days when lines would not be a problem except on the most popular rides.

Having an Express Pass is essential to enjoying the Universal Studios experience I discovered on a family trip to the theme park two summers ago. The price of the passes -- even the single trip ones -- were close to what we paid for our tickets in the first place. During our July trip, the parks were very crowded and Express Pass, which works on most but not all rides, allowed us to experience much more and wait in line for dramatically less time.

How could this work for Disney?
Making the most popular rides FastPass+ only would allow Disney to charge extra for the ability to ride popular attractions more often. The company could sell a limited amount of unlimited tickets, which allow users to snap up as many passes as they want. The company could also sell small add-ons -- such as the ability to ride a specific ride one extra time for a small fee. More importantly, the company could do this while protecting the current FastPass+ experience.

Want to visit Epcot and ride Soarin' once? You pay the normal ticket price. Want to ride it five times, you can, if you pay extra.

With FastPass+ Disney has the opportunity to end lines, deliver a better regular ticket experience while also opening up additional ways to make money by offering premium experiences. The company already does this through character breakfasts, dinner shows, and other premiums. Making their parks entirely reservation based would open up more opportunities to drive revenue from existing park customers in a way that feels like an added service rather than a shakedown. 

The "Oracle of Omaha," Warren Buffett, is one of the wealthiest men on the planet and one of the most respected and successful investors in history. His tale, which perfectly encapsulates the American Dream, serves as an inspiration for many who turn to entrepreneurship and Wall Street to fulfill their career aspirations.

Like most glorified figures, Buffett couldn't have accomplished so much if it weren't for the people around him. From business relationships to personal ones, Buffett owes much of his success to several key figures in his life.

1. Howard Buffett
One of Warren Buffett's earliest influences was his father, Howard Buffett, who owned his own brokerage business. Young Warren Buffett was known for hanging around and putting up stock prices on a large board, following his father's trades. When he was 10, Warren Buffett visited the New York Stock Exchange and by 11, he bought his first stocks -- three shares of Cities Service Preferred.

2. Benjamin Graham
Hailed as the father of modern value investing, Benjamin Graham's influence on Buffett is clear in every investment decision Buffett makes. Buffett first learned about Graham when he read his book, "The Intelligent Investor," in his last year at the University of Nebraska; he then enrolled at Columbia University to study under Graham, graduating with a master's in economics. After graduation, Buffett set his sights on a Wall Street career and sought out Graham, who was on the Board of Directors at GEICO. Though his initial attempt to work for Graham was denied, even after offering to take no salary, he was eventually recruited by his icon and began crafting his winning investment formula.

3. Charlie Munger
Buffett's closest business partner and fellow Omahan is Charlie Munger, an investor who attended Harvard Law without a bachelor's and eventually joined Buffett's business enterprise. While Munger had other ventures that were successful, he is best known as vice chairman of Berkshire Hathaway and cohost of the company's famous annual shareholder meetings. Thanks to Munger's influence, the new partnership generated gains of 1,156 percent in the first 10 years, compared to the Dow's growth of 122.9 percent.

4. Astrid Menks
Buffett's personal life has mostly been closed to the general public, but his relationship with his wife, Susan, and Astrid Menks is well-known. Buffett and his wife Susan separated in 1977 but never formally divorced. Before Susan left, she told her friend, Astrid Menks, to look after him. This began a long relationship between the two -- which Buffett's wife both knew about and supported. In fact, the three sent out joint Christmas cards each year. Susan and Buffett remained married until she succumbed to cancer in 2004; Menks and Buffett married two years later.

5. Alice Schroeder
Alice Schroeder is the author of "The Snowball, Warren Buffett and the Business of Life," Buffett's biography and a window into the quiet billionaire's life. Schroeder's Wall Street background -- and the fact that she was the only sell-side stock analyst Buffett talked to -- made her the ideal biographer for the famed investor. She spent more than 2,000 hours with him to learn the details of his life. However, despite Buffett's insistence that she tell the truth, unflattering or not, about his personal life, he was displeased with how he was portrayed and disassociated himself from Schroeder after the book was published. This article originally appeared on GoBankingRates.

Kenny G is trading stocks. You may not want to follow his lead. Credit: Kenny G official Facebook page.

Are you trading stocks? If so, you're in good company. Grammy-winning saxophonist Kenny Gorelick told Reuters that, over the past decade, he's made about as much trading stocks as he has selling music.

How frequently he trades isn't made clear in the article. Rather, it paints the picture of an interested former accounting major who struck it rich buying into Starbucks pre-IPO and who now starts each morning watching the ticker feeds.

Turning sour notes into a sweet melody
There's much to like about Gorelick's story. For one thing, he's taking control of his financial destiny at a time when the music business is struggling with new distribution mechanisms. According to data from the Recording Industry Association of America, streaming music from the likes of Spotify and Pandora Media accounted for 21% of industry revenue last year. At the same time, CD and download sales declined 13% and 15%, respectively, according to Nielsen SoundScan.

"Most people in the music business don't make as much money as we used to," Gorelick told Reuters. He counts himself among that group despite releasing a top 10-selling jazz album just four years ago. Trading supplements income he might have earned on tour or in the studio 20 years ago.

Bad money advice is bad, no matter how good it sounds
So if it works for Kenny G, shouldn't you also be trading stocks actively? I'm afraid not. Research shows that active stock traders don't do as well as buy-to-hold investors. In one case, a real-world study of day-trading activity found that 80% of participants lost money.

Of course, you don't have to be a day trader to forgo serious profits. A study of his various trades at Motley Fool Stock Advisor -- our signature service and one of the best-performing investing newsletters of the past decade -- revealed that Fool co-founder David Gardner would have improved his average performance by better than 50 percentage points per pick had he never sold.

The message? Switching into and out of positions too quickly can cost you more than you might think. Here are four more reasons why you might not want to base your strategy on Kenny G's trading system:

1. Kenny G has WAY more money than you. Unlike buy-to-hold investing, in which a few bucks and an account at ShareBuilder will allow you to build positions on the cheap, day traders employ huge swaths of capital to turn a quick $0.05 profit into hundreds or even thousands of bankable dollars. Kenny G is rich enough to afford that sort of bet. Can you say the same?

2. Transaction costs mean you have to be right way too often. Brokers need to make money somehow, which is why every trade carries a commission. Frequent trading can cost hundreds or even thousands in annual fees, creating pressure to make crazy bets in hopes of landing a huge score.

3. So much can go wrong in a few microseconds, and you aren't faster than a computer. Think of the various innovations in high-frequency trading and the flash crashes we've seen. If day trading requires getting into and out of positions in a few minutes -- at most! -- and the market can fall apart that fast or faster, aren't you all but guaranteed to get wiped out at some point?

4. Don't you want a life? Day trading means spending hours on end staring at screens and analyzing data, all in pursuit of a tiny opening that could close in microseconds. You can and should do better, especially when doctors say that sitting is the new smoking.

We don't know how much Gorelick day trades. All we know is that he's active, and that alone can have consequences that -- by the sounds of the Reuters article -- he has largely managed to avoid. There are good reasons for that, I think, which I'll get into next week in a follow-up article profiling what I see as his better money habits.

See you then. In the meantime, if you want to be more like Kenny G, log out of the trading software, shut off the computer, and pick up a saxophone.You'll keep more of your money and have a little fun along the way.

Bitcoin hit a new 2014 low last weekend, a news development that is surely distressful to Bitcoin investors (i.e. speculators), but one that shouldn't come as a surprise. After all, the premise that bitcoin, or any other alternative cryptocurrency, would "go mainstream" or become anything more than a speculative toy was flawed from the start. Here are three reasons why.

1. Volatility 
As a currency, Bitcoin has little value if not converted into dollars, and the value of a single Bitcoin as represented by goods is essentially meaningless. Considering Bitcoin's extreme volatility since its inception, the asset gives the user absolutely no stability, or no store of value, a key component of any functioning currency.

Source: Coindesk.com 

As the chart above shows, the cryptocurrency rose from almost nothing to over $1,000 before crashing down to below $300. Even on a day-to-day level, volatility reigns supreme as in the last week the currency has moved within an approximate 25% range. Bitcoin's rise from near zero has been dramatic, and it's easy to see how increased speculation sent the price of the asset flying, but like most bubbles there is little underpinning the actual value of Bitcoin.  

While national currencies are backed by governments and fluctuate based on money supply other economic factors, Bitcoin's value is largely driven by speculators rather than people actually using the currency. In fact, one of the major drivers for the asset's surge last year was increased coverage and media hype, in part relating the downfall of Silk Road, the online black marketplace that accepted only Bitcoins, in October 2013. As the media attention has subdued, the price of Bitcoin has fallen, and Bitcoin transaction volume has been relatively flat, indicating adoption has not significantly grown.  

2. There's no need for it
The dollar is the most valued currency in the world, and U.S. treasuries are considered the safest investment asset class. Bitcoin proponents make three main arguments for its use. First, that it can be the basis of a powerful global transaction network. Second, that it can be a better store of value than national currencies. And third, that it can be a safer and more efficient payment system. However, only the last of these holds any water as there is no need for Bitcoins to replace dollars in transactions, even if they can, and Bitcoin has demonstrated itself to be a poor store of value due to its volatility. With only about 13 million Bitcoins in circulation and the final number capped at 21 million, the supply is too limited for them to serve as a viable currency. 

While the technology behind the cryptocurrency may represent a safer method of buying and selling over the Internet, the asset will never take hold as a currency due to its limited supply and speculator manipulation. The technology used to encrypt Bitcoin would be better applied to the current monetary system, rather than through the invention of an entirely new currency. Bitcoin is simply economic Esperanto. It's a solution without a problem. The currency in use works fine.   

3. It's too shady
The fall of the Silk Road marketplace and the implosion of the Mt. Gox exchange earlier this year highlight another set of problems with Bitcoin. While the cryptocurrency seeks to solve the flaws of our current monetary system, it is not without its own set of troubles. Regulations on Bitcoin are still in development, and the currency has been deemed illegal in a handful of countries and restricted in many others. The IRS has ruled that the asset is not a currency but property, making it subject to capital gains tax. Instead of serving as a currency for honest exchange, Bitcoin has found itself to be a favored medium for money laundering and black market purchases of items such as drugs and child pornography.  A New York regulatory agency last year called it, "A virtual Wild West for narcotraffickers and other criminals."

A game of financial Quidditch
Perhaps one Internet commenter best sums up the enthusiasm among Bitcoin supporters, saying, "The idea of a mathematically derived self-regulating currency completely divorced from any physical representation or central management is REALLY COOL. 
I mean it's just a REALLY COOL experiment in economics and technology." Sure, Bitcoin may be interesting and cool in some sense of the word, but the quote underscores the idea that Bitcoin's appeal isn't underpinned by any practical application it serves, but mostly by a sense of fantasy or experimentation in a small percentage of the population. Quidditch, the sport invented by J.K. Rowling in her series of Harry Potter books, emerged from the fantasy world, but is now being played by more than 300 teams in 20 countries, according to the International Quidditch Association. Despite that success, to most of us the sport will remain a fictional invention, never to go mainstream.

Bitcoin is similar, except a lot more dangerous since it involves money. There will always be a place for Bitcoin and its ilk somewhere in the bowels of the Internet, but the cryptocurrency will never challenge the dollar as a medium of exchange.   

Environment influences us a lot more than we like to give it credit for. You might think that you are preternaturally aware of everything you're doing, but the fact is that we are often on autopilot. 

Take the interesting but also tiring experience of conference attendance. Here you are, attempting to focus on one panel discussion after another, make a good impression on peers, network to an appropriate degree, and not spill coffee on yourself while awkwardly taking notes in an uncomfortable folding chair. You have no conception of what the weather is outside, are possibly jetlagged, and are dreading another long march to the bathroom, which is counterintuitively located on the opposite side of the building.

But there is hope: the conference breaks, and you are ushered by nice people and cheery signposts to the buffet. Hurrah, some food to restart the thinking process! 

What do you choose to eat? It turns out that your brain is a lot less involved in this important decision than you would it expect it to be. 

An experimental breakfast 
In a recent PLOSone paper, researchers Brian Wansink and Andrew S. Hanks explore how people fill their plates at a buffet using the most simple and elegant of experimental designs: food order. One buffet line featured breakfast heavyweights like cheesy eggs, bacon, and potatoes as the first options and the other one started with fruit, yogurt, and granola. Altogether, both tables had the same seven foods -- the only difference was the order they were presented in.

The 124 studied conference attendees were then directed, at random, to one line or another and their food selections observed.  

As it happened, what was seen first in the buffet line had a significant effect on what was selected. When encountering cheesy eggs first, 75% of diners took some; when encountering them last, only 29% did. The same happened with fruit: 86% of people who saw fruit first took some, compared to only 54% of people who saw fruit last.

The other crazy thing is that the first option had an influence on all the other foods that people choose. You're already taking cheesy eggs, so it makes sense to add some bacon and potatoes, right? Right: 65% of cheesy-eggs-first diners also took either bacon or eggs, compared to only 20% of fruit-first diners.

All in, "the first three food items a person encountered in the buffet comprised 65.7% of their total plate."

In other words, much as we'd like to think that we're paying attention to our surroundings, especially on an important issue like what to have for breakfast... we simply are not. 

Lessons from the buffet line 
Brian Wansink is also the author of the books Mindless Eating and Slim by Design, which stress the importance of environment in shaping our eating habits. His research has basically led him to conclude that we can embrace our mindlessness by adjusting our environments to help prompt better food decisions -- rather than trying to force ourselves to be aware of everything all the time.

The lesson from this study is that what you see first tends to be what you go with. At your next conference, you could interrupt the process by choosing to start at the healthier end of the buffet line (adhering to rules about which side to start from is so boring anyway). 

At home or work, you could change environment so that instead of seeing candy bars and donuts when you walk into the kitchen, you see a bowl of fruit. You open the fridge, and instead of Coca Cola you find milk or sparkling water. 

Considering the implications, I can't help but wonder how this might apply to other walks of life. Eating is important, but so is exercise. How can I exercise more mindlessly? Work more productively? The list goes on. 

To learn more, take a look at "Slim by Design: Serving Healthy Foods First in Buffet Lines Improves Overall Meal Selection" by Brian Wansink and Andrew S. Hanks. 

3M world headquarters in Maplewood, Minnesota. Source: Flickr/Nick schwartz.

3M is a legendary American manufacturer that's been around for 112 years. For products ranging from household adhesives to flame-retardant aircraft sealants, 3M is the brand customers turn to again and again.

From a business perspective, standing out from the rest of the pack has serious perks. For example, 3M's well-known brand gives the company impressive pricing power in an industry that's typically lacking. And pricing power is just one of the characteristics of 3M that an astute investor like Warren Buffett would love about this company (though he's yet to buy shares, from what I can tell).

Given its time-tested qualities, is 3M a stock investors should add to their portfolios today? Let's take a closer look.

The pros

Source: Wikipedia.

In my mind, two things stand out first and foremost when it comes to 3M: the strength of its brand and its hefty margins. Its products might seem simple -- Scotch Tape is just sticky plastic, after all -- but they are not easily replicated. And the company does an excellent job of manufacturing proprietary products while keeping costs low.

If you hold 3M up against some of its diversified manufacturing peers, it comes out on top in terms of operating margin, a measure of a company's pricing strategy and operating efficiency:

As of the last 12 months. Source: Morningstar.

What's more, 3M's operating margins are on the rise, reaching 22.8% in the second quarter of 2014 from 20.9% at the end of 2011.

I don't see this characteristic of 3M fading in the near future. The company continues to invest heavily in research and development to make its products even better over time. In fact, management intends to up the ante in R&D expense from 5.6% of revenue today to roughly 6% looking to 2017. For comparison, its peers like GE and United Technologies spent 4.4% and 4.1% of their revenue on R&D in 2012, respectively.

To date, 3M's brand is well intact, as are its enviable margins. And 3M's CEO Inge Thulin has done a commendable job focusing the company on internally driven growth instead of expanding through acquisitions. The latter was the tactic employed by prior CEO George Buckley, but I would prefer to see these two strategies go hand in hand. As a result of Thulin's efforts, organic growth jumped from 2.6% in 2012 to 4.8% as of the end of the latest quarter.

All things considered, 3M is a rock-solid company operationally, with a healthy dividend yield of 2.25% and a well-rounded product portfolio. Peering into the future, I expect its core segments of industrial, healthcare, and electronics and energy to benefit from rising demand -- and these three areas represent nearly 70% of the company's revenue, compared a small 15% slice for consumer products. 

So, with of these aspects in mind, you might be wondering, "What's not to like about 3M?" Well, let's kick the tires a bit more.

The cons

As I look at 3M from a different perspective, there are a few troubling aspects that stand out in my mind.

First off, 3M's stock price as it stands today is far from cheap. In fact, it's about as expensive as it has been in the last half-decade. Trading around $137 per share, 3M's stock commands a price-to-earnings ratio of 19.8, a figure 19% higher than its five-year average of 16.6.

MMM data by YCharts.

I would venture to say that "cheap" ceased to be an apt adjective three years ago, when 3M traded at 13.7 times earnings. And we were merely two years into the bull market then, rather than five.

What's more, 3M's valuation seems out of step with the company's earnings growth. Over the past five years, in the midst of the U.S. economy's steady turnaround, net income growth at 3M has hovered right around 6%. The same goes for earnings per share. Thus, 3M's price-to-earnings growth, or PEG, ratio stands at 2.4, quite a bit higher than the desired metric of 1.

Could future growth outpace the recent past? That's a possibility. As of now, Wall Street analysts predict a five-year growth forecast of 7.3%. That's not a huge increase, but management expects earnings per share to get an additional boost from the company's ongoing ambitious buyback program. This could be true, but I have some skepticism that management should even be allocating a huge chunk of the company's spare change toward its own shares. And this leads me to my second bearish argument.

Late last year, 3M announced it would embark on a massive share buyback program that would amount to $17 billion-$22 billion in total through 2017. The midpoint of that range is 73% higher than the midpoint of its previous range of $7.5 billion-$15 billion. It ranked as the largest buyback announcement in corporate America in 2013.

Such a move would be nifty if the company was scooping up shares at an attractive price, but that doesn't look to be the case, as laid out above.

At this particular moment, it's hard to see the merit in management's capital allocation strategy. Instead, I'd rather see management load up on shares precisely when they seemed cheap instead of embarking on a giant four-year buying spree.

Brand-new 3M products have failed to contribute significantly to revenue growth in recent years.

Finally, as I've described before, this is a research-driven company. 3M's leadership makes that perfectly clear. But in recent years, the company's frequently touted "New Product Vitality Index," or NVPI -- which shows percent of revenue from products less than five years old -- has hovered around 33%, despite the fact that management set goals for it to reach 40% by 2015. As we drew nearer to 2015, that target was subsequently revised last year. And their latest goal has been both ratcheted down and pushed back: NVPI is now projected to reach 37% by 2017.

Given this trend of moving the goalposts, I'm not convinced the capital plowed into R&D is generating the results shareholders would like to see.

The takeaway for investors

Taking the pros and cons into consideration, I would hold off on purchasing 3M's shares. I appreciate the company's strong brand and steady margins, but can't wrap my head around a giant buyback program that could ultimately destroy shareholder value given the stock's lofty price. I'm also not keen on the lack of discussion from management about whether the company is getting the most bang for its buck on R&D spending.

If the shares pull back, or if my concerns are discussed frankly by 3M's leadership, this is a company I would definitely consider for a long-term investment. For now, however, I'm content to fish around for a more enticing manufacturing stock.

Warren Buffett has never been shy about packing lessons for successful investing into his annual letter to shareholders. That letter is a treasure-trove of insight, presented in a folksy manner that is not only easy to read but incredibly entertaining.

With the market tumbling we're all likely in need of a few doses of Warren's unpretentious advice, so I dug through his past shareholder letters to find some gems that may help us navigate the current market drop and build a bigger nest egg for retirement.

1. "It's better to have a partial interest in the Hope diamond than to own all of a rhinestone," wrote Buffett in 2013.

Buffett is always hunting for great companies that he can buy for Berkshire Hathaway shareholders, but if he can't buy the whole company, he's OK with owning a smaller piece of it instead. Applying this advice to our own investments means spending less time considering how many shares of a company we can buy and more time figuring out where we believe the company will be in ten years. Doing that will help us avoid the pitfall of foregoing investments in great companies like Amazon or Priceline when they're on sale to buy lower quality companies with smaller share prices.

2. "A "normal year," of course, is not something that either Charlie Munger, Vice Chairman of Berkshire and my partner, or I can define with anything like precision," wrote Buffet in 2010.

Sure, the average annual return for the S&P 500 has been 8.14% over the past decade, but assuming that will be our return this year, next year, or any year is folly. Returns are volatile and will continue to be volatile, so we should focus less on the returns for any one period of time and instead focus on buying great companies and socking them away. Consider this point: While the S&P 500 has experienced plenty of fits-and-starts over the past 10 years, those who have owned it all along are up 103%.

3. "Long ago, Charlie laid out his strongest ambition: 'All I want to know is where I'm going to die, so I'll never go there,'" wrote Buffett in 2009.

Buffett avoids businesses whose future he can't evaluate. Instead, he focuses on finding businesses that offer a predictable profit for decades to come. Taking the long-haul approach to finding great companies goes far beyond identifying the next big thing -- after all, during the Internet boom there were plenty of Internet companies that soared on expectations rather than profit, and many of those companies have since gone bankrupt. Instead, we should be investing in companies we can understand that are likely to remain winners.

4. "We will never become dependent on the kindness of strangers. Too-big-to-fail is not a fallback," wrote Buffett in 2009. 

Warren's cash stockpile is a thing of legend, and while that cash hoard holds back his returns in periods of growth, it also protects him when markets turn sour. Importantly, it also gives him the financial flexibility to take action and buy when prices are right. That plan-ahead mentality is something every investor can embrace by making sure there's always some dry-powder around to deploy during the market's inevitable declines.  

5. "We would rather suffer the visible costs of a few bad decisions than incur the many invisible costs that come from decisions made too slowly -- or not at all -- because of a stifling bureaucracy," wrote Buffett in 2009.

Buffett doesn't hesitant when he's presented with an idea that hits the mark. He recognizes that he won't be right every time, but he also believes that taking action is critical to realizing the potential of an opportunity. As investors, we can emulate Buffett's approach by making sure that once we've done our due diligence and picked our favorite investments we take action and buy, regardless of the market's short-term machinations.

6. "Unlike many business buyers, Berkshire has no "exit strategy." We buy to keep. We do, though, have an entrance strategy, looking for businesses in this country or abroad...available at a price that will produce a reasonable return. If you have a business that fits, give me a call. Like a hopeful teenage girl, I'll be waiting by the phone," wrote Buffett in 2005.

Buffett keeps strictly to his investment discipline, but he also keeps an open mind to great ideas that fit into his strategy. Those ideas can come from various places. His acquisition of Clayton Homes, for example, was sparked by an autobiography of Clayton's founder Jim Clayton which had been given to him as a gift by some University of Tennessee students. Keeping open to opportunities, regardless of their origin, may help us find worthwhile investments for the long term, too.

7. "Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy only when others are fearful," wrote Buffett in 2004.

Buffett knows that emotion is a dangerous weapon that, if used incorrectly, can result in significant loss -- and, if used correctly, can result in significant gain. Emotional reactions to surging or descending markets can make people buy when they should sell and sell when they should buy. Buffett often compares taking advantage of market slides to shopping for groceries. Last week on CNBC he summed it up by saying, "If you're buying groceries, you like it when prices go down next week. And you like it if they go down further the next week." Just as we like getting a good deal on the items at the grocery store we would be buying anyway, we should also be fans of getting a good deal on our favorite companies.

Following in Buffett's footsteps
Buffett has no idea whether he'll outperform the S&P 500 over the next year, but he does know that Berkshire Hathaway's book value has grown a compounded annual 19.7% over the past 49 years. Similarly, we don't know if our investments will outperform the market daily, weekly, or yearly, either. What we can feel pretty good about is the knowledge that investing in great companies like Coca Cola and Wells Fargo -- two companies that are long-standing Buffett holdings -- may help put us on a path to a less-worrisome retirement. 

Source: White House on Flickr. 

Don't look now, but Obamacare's open enrollment period for 2015 is scheduled to open in just five weeks, shortly after mid-term elections are over.

As you might imagine there's a lot of uncertainty surrounding the open enrollment period this year considering what happened last year. If you recall, IT-architecture problems bogged down the federally run health care exchange Healthcare.gov for the first two months, putting estimated enrollment figures behind by more than 1 million people at one point. Luckily, a late surge of enrollment by procrastinators in March allowed Obamacare's enrollment figures to find the mark and surpass estimates.

Obamacare uncertainty prevails
But, this year is a lot different than last. For starters, the open enrollment period is a mere three months (Nov. 15, 2014 to Feb. 15, 2015). Additionally, the "easy" enrollments are out of the way, meaning insurers and the Department of Health and Human Services will need to work together to educate and encourage the remaining uninsured to sign up for health insurance.

Yet, as we examined last week, it could also be a challenging time for consumers looking to get preventative care. Based on a report from the Physicians Foundation, which is released every other year, four out of every five doctors view their current patient docket as full or overextended. Furthermore, 44% of all physicians polled noted that they would actively look to reduce the number of new patients they take on. This creates quite the dilemma considering that 2015's enrollment estimates project that 5 million to 6 million new people will enroll on the exchanges in addition to the 7.3 million which were still paying members as of mid-August.

So, how does America solve its doctor shortage problem that's effectively being caused by the Affordable Care Act's individual mandate requiring everyone to purchase health insurance? Ironically the answer can be found by looking within the ACA and its ability to promote cutting-edge technology as a means of reducing doctors' burdens.

Technology leads the charge
To be clear, it was the American Recovery and Reinvestment Act passed in 2009 that provided the impetus for health care companies to begin their switch from physical health records to electronic health records, or EHRs, not Obamacare. This transition, while it may seem trivial in nature with regard to reducing physical paper in the workplace, was the green flag for technology to take on a big role in the health care sector.

Obamacare, though, has provided a channel with which medical-based technologies can shine (as you'll see below) and lighten the load of physicians to the point where they may be able to handle an influx of new patients caused by Obamacare.

Source: U.S. Department of Agriculture via Flickr.

Telemedicine: the answer to solving our nation's doctor shortage?
Telemedicine, or the idea of videoconference with your doctor from the comfort of your own home, had been considered taboo by health insurance companies prior to the adoption of Obamacare. However, as privately held telemedicine pioneer Teladoc has noted, insurance companies have recently been eager to jump on board with covering these virtual visits. Teladoc has signed agreements recently with Aetna and Blue Shield of California, run by WellPoint , to cover telemedicine visits, while also landing agreements with large corporations such as Home Depot, and T-Mobile.

According to Teladoc's sales figures, as reported by Fortune, the company doubled its revenue in 2013 and is on pace to again double its revenue this year. As CEO Jason Gorevic noted with regard to the Affordable Care Act, "It's certainly an accelerator for us." Funding has also been flowing into Teladoc like water as lenders see a potentially lucrative opportunity unfolding in telemedicine. A survey conducted by Towers Watson and the National Business Group on Health also noted that 52% of large businesses plan to introduce telemedicine as an option for their employees, up from 28% in 2014. 

Why telemedicine you ask? First, telemedicine allows patients and doctors to meet on their own terms without time being a major factor. It's not uncommon for doctors to fall behind schedule during their day treating patients, or patients to run late because of traffic heading to the doctor's office. These time constraints can be largely eliminated with the use of videoconferencing.

Secondly, telemedicine can prove to be extremely cost-effective over the long run. Being able to connect with a physician over the web can reduce unnecessary hospital or doctor visits, which can add up rapidly, as well as quickly combine the knowledge of multiple doctors via a video conference in order to efficiently expedite a diagnosis.

Finally, telemedicine could improve outcomes by leading to speedier diagnoses. It's not always convenient for people to travel from rural areas to a doctor's office, so telemedicine could wind up easing this concern.

These gadgets could play an important role, too
But, telemedicine alone won't alleviate doctor shortages. A number of other technological wonders are expected to step up and play a big role.

Source: Apple.

Apple's Health app, for starters, could be a major tool used by doctors to aid with, and expedite a diagnosis. Right now, admittedly, Apple's Health app is in the infancy stage. Following the release of its latest operating system iOS 8, Apple Health can only aggregate information from other health apps onto an easy-to-read single screen; but even then not all other health apps are compatible for Apple Health at the moment. In the future, however, as the Health app evolves it could become a hub for you basic medical information which your physician may rely on to get an accurate picture of your health.

There are other well-known companies and devices that have been working toward connecting patients with their doctors beyond the boundaries of a doctor's office for years.

Medtronic , for example, launched its Medtronic M-Link cellular accessory in 2010 which allows its cardiac device patients to have the information stored on their devices downloaded and securely sent to their doctor via the CareLink network. The idea here is regular observation of the data could improve a patients' overall health if changes needed to be made, and that it would ultimately reduce unnecessary visits to the doctor. 

By a similar token the king of wireless technology Qualcomm has also focused at least a portion of its future on the health care sector. Qualcomm's Life division, for instance, is working with its customers to develop devices that can wirelessly transmit data that goes into a cloud accessible by clinic computers, as well as a doctor's mobile device such as a smartphone or tablet.

Ultimately, these are just three of a growing number of health-connectivity devices either on the market or under development.

The sky is the limit
The reality is that we haven't even touched the tip of the iceberg yet on technologies' potential to help doctors manage what's expected to be a large influx of patients. Will it work? Over the long run I suspect so, but there's certainly a trial and error period that tech-based health care providers are only now beginning to wade into. Could doctor's availability get worse before it gets better? I'd suggest that to be plausible considering the rapid influx of new patients from the ACA, but over time I view wireless devices and telemedicine playing a key role in allowing doctors to see more patients.

Mark Zuckerberg meets with Mexico's President Peña Nieto to discuss Internet.org. Source: Facebook.

"Connectivity is a human right." -- Mark Zuckerberg

Mark Zuckerberg knows a thing or two about the Internet. After all, he's piloted Facebook  into a social media Goliath that is increasingly used to share one-to-one, one-to-some, and one-to-everyone content.

As a result, Facebook has a billion users, billions and billions of dollars in revenue, and billions of dollars in earnings. But, Facebook has a problem. In order to fuel future growth it needs to tap into the billions of people on the planet who don't currently have Internet access.

So, Zuckerberg is partnering with some of the biggest companies in technology, including Nokia and Qualcomm, on Internet.org, an organization dedicated to overcoming the obstacles that are blocking Internet use in developing nations and that (intriguingly) may revolutionize healthcare along the way.

Why this is a long shot
Zuckerberg will need every ounce of his think-big attitude to overcome the challenges associated with bringing the Internet to developing countries.

That's because people in impoverished nations not only lack access to the Internet, but also to healthcare education and healthcare providers.

To put Zuckerberg's challenge in better perspective, consider that in sub-Saharan Africa, where more than 900 million people live,  the average person lives to just 56 years of age, well below the average European, who typically makes it to 80.

That means that people living in these regions are far more focused on basic survival than they are on accessing social media.

Innovating solutions
Internet.org has its hands full. Many countries don't have the infrastructure necessary to support Internet access and in those countries that do have the nuts and bolts necessary, the cost of accessing the Internet is a big barrier.

So, Internet.org launched an app in July that attempts to skirt those challenges.

Since the app is designed for mobile devices, it leverages the fact that 85% of the world's population lives in areas with cellular coverage. And since the app provides access to a suite of eight Internet sites for free, it overcomes worries that Internet access would be too pricey for people in these regions.

Source: Mobile Alliance for Maternal Action

Healthcare game-changer?
In order to make Internet.org's app highly relevant in developing markets it includes access to two important health education services -- Facts for Life and the Mobile Alliance for Maternal Action, or MAMA. Those sites provide health care information on immunization, HIV, and childbirth. Education on those subjects could prove life-changing in these markets given that globally there are 9 million preventable childhood deaths every year.

Zuckerberg, whose wife Priscilla Chan is a pediatrician, believes that access to this health care information could have a big impact in countries like Zambia, which is the first to gain access to the Internet.org app.

At the Mobile World Congress 2014 in February, Zuckerberg outlined the mission of Internet.org, in part, by saying, "If you increase the number of people in emerging markets that have access to the Internet... you could decrease the childhood mortality rate by 7%."

Zuckerberg's optimism may be justified. According to MAMA's research in Bangladesh, 69% of survey respondents that use MAMA reported attending at least four antenatal care visits during their pregnancy, versus 32% nationally, and 65% of respondents reported attending a postnatal care visit, versus 27% nationally. Such an improvement could be game-changing in countries like Zambia, which has the 21st worst maternal mortality rate and the 17th worst infant mortality rate in the world.

Source: Oculus VR

An even longer long shot?
Using Internet.org's app to deliver valuable healthcare education is a great first step because it encourages people to seek out medical care. But that knowledge only goes so far when doctors are scarce.

So while Internet.org is a great starting point in boosting healthcare utilization in rural and impoverished markets, significantly more will still need to be done to improve healthcare access.

Zuckerberg thinks he may have an answer to that problem, too. In March, Zuckerberg acquired virtual reality gaming company Oculus VR in a deal that cost Facebook $2 billion.

Zuckerberg thinks that Oculus' virtual devices could someday become the next big computing platform, displacing mobile. If he's right, then virtual devices could eventually be used by patients in developing nations to "visit" doctors located anywhere on the planet.

Planning ahead
Internet.org and Oculus VR may have the potential to change millions of lives, but they could also be brilliant long-term investments in Facebook's future. Zuckerberg's intent is to break down barriers to free-flowing communication; but in the process Internet.org may also end up saving lives and helping people in developing markets live longer. If so, Zuckerberg may discover that the next billion Facebook users end up coming from some of the planet's least likely places.