Ed’s Daily Notes for February 25th   Leave a comment

Yahoo News: Pentagon plans to shrink US Army to pre-WWII level

The Pentagon plans to scale back the US Army by more than an eighth to its lowest level since before World War II, signaling a shift after more than a decade of ground wars.

Saying it was time to “reset” for a new era, Defense Secretary Chuck Hagel recommended shrinking American forces from 520,000 active duty troops to between 440,000 and 450,000.

This is a “good news/bad news” for defense contractors. It is certainly bad news for suppliers of conventional materials for the military. However, this could be good news for unconventional tech suppliers, like drone manufacturers.

Fox News: Samsung announces long-awaited Galaxy S5, smart wear additions

Smartphone titan Samsung announced the long-awaited Galaxy S5 phone on Monday, along with new versions of wearable tech including an improved smartwatch and the first fitness tracker with a hi-def interface.

As expected, the Galaxy S5 boasts a water and dust resistant body and comes loaded with juiced-up features, which the company says focuses on what its customers are looking for the most in a smartphone.

The new S5 is much lighter than its predecessor, the Galaxy S4, and boasts a much sharper display with a 5.1″ inch Super AMOLED display along with fast user connectivity with LTE Category 4 network and fifth generation Wifi and also bells and whistles like fingerprint scanning and the first heart rate monitor on a smartphone.

…Other eye-catching features on the S5 are the Download Booter, which can download 1 GB of data per 30 seconds, enabling the user to download a full-length movie in a matter of minutes.

A few other phone makers introduced new models, including HTC and BlackBerry.

Personally, I’m still waiting for the smartphone with the 27 inch screen. I think I’m gonna need bigger pockets…

Bloomberg: Rolls-Royce Drone Ships Challenge $375 Billion Industry

In an age of aerial drones and driver-less cars, Rolls-Royce (RR/) Holdings Plc is designing unmanned cargo ships.

Rolls-Royce’s Blue Ocean development team has set up a virtual-reality prototype at its office in Alesund, Norway, that simulates 360-degree views from a vessel’s bridge. Eventually, the London-based manufacturer of engines and turbines says, captains on dry land will use similar control centers to command hundreds of crewless ships.

Drone ships would be safer, cheaper and less polluting for the $375 billion shipping industry that carries 90 percent of world trade, Rolls-Royce says. They might be deployed in regions such as the Baltic Sea within a decade, while regulatory hurdles and industry and union skepticism about cost and safety will slow global adoption, said Oskar Levander, the company’s vice president of innovation in marine engineering and technology.

…While the idea of automated ships was first considered decades ago, Rolls-Royce started developing designs last year. Marine accounts for 16 percent of the company’s revenue, data compiled by Bloomberg show. Descended from the luxury car brand now operated by Bayerische Motoren Werke AG, Rolls-Royce also makes plane engines and turbines.

The company’s schematics show vessels loaded with containers from front to back, without the bridge structure where the crew lives. By replacing the bridge — along with the other systems that support the crew, such as electricity, air conditioning, water and sewage — with more cargo, ships can cut costs and boost revenue, Levander said. The ships would be 5 percent lighter before loading cargo and would burn 12 percent to 15 percent less fuel, he said.

Crew costs of $3,299 a day account for about 44 percent of total operating expenses for a large container ship, according to Moore Stephens LLP, an industry accountant and consultant.

Rolls Royce is an interesting company for those of you who can trade on the London Exchange. In the U.S., it is only traded OTC, and the volume is too light to consider owning. I was surprised at their financials, because Rolls Royce has the largest enterprise value of any company I have ever seen, at $1.8 trillion, easily 4 times the size of companies like Apple (AAPL) and Exxon (XOM).

Fox News: One-day tickets at Disney World now more expensive

Disney World has raised the one-day ticket price to the Magic Kingdom by $4 so that it now costs $99 before taxes for visitors over age 9.

Single-day tickets for the resort’s other parks — Epcot, Disney’s Hollywood Studios and Animal Kingdom — also went up by $4. It now costs $94 to get into those parks for visitors over age 9.

For children under age 10, the cost is $93 to get into the Magic Kingdom and $88 to enter the other parks.

As a Disney shareholder, I approve. Those tickets were never cheap anyway. And I wasn’t planning a trip there any time soon…

Fox News: Harold Ramis, ‘Ghostbusters’ star, dies at 69

R.I.P. Egon Spengler. Now you know what it’s like from the other side.

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Posted February 25, 2014 by edmcgon in Market Analysis, News, Stocks, Technology

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