Mixed outlooks are revealed for Northern Trust’s future stock performance

By Jinman li
Medill Reports

Analysts and shareholders have mixed outlooks for Northern Trust Corp.’s stock price in the next 12 to 24 months, with changes in interest rate and the potential to expand just some of the challenges the financial services company faces.

Although just one of the 21 analysts polled by Bloomberg has a sell rating on Northern Trust’s stock, seven analysts rate it as a buy and 13 rate it a hold, with an average 52-week price target at $111.55. The stock closed at $107.04 on Tuesday. Its 52-week low was on May 17 at $85.41, and its 52-week high was on March 12 at $110.81.

“They’re close to being undervalued, but just not quite there yet,” said Jeffery Harte, an analyst at Sandler O’Neill & Partners LP who has a hold rating on the stock. “It’s a pretty good company with really good growth prospects, but it also has a much higher valuation P/E multiple than its peers, so it is priced appropriately.”

The trailing 12-month price-to-earnings ratio for Northern Trust, which measures its share price relative to its per-share earnings, is 20.96, compared with the financial sector average of 19.60, according to data compiled by Reuters.

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Annual blessing of the Bodega Bay fishing fleet marks a shorter and uncertain salmon season

By Rebecca Fanning
Bodega Bay, Calif.

The Karen Jeanne rocks and sways as Dick Ogg steers out of Bodega Harbor, past the rocky breakwall where surf-casting fishermen wave from their perches.

Behind him, an array of boats fall into line, each decorated with signs and flags, their decks full of fishermen, families and friends. To some this route is a familiar morning commute, the first turn on a many-miles journey in pursuit of albacore tuna, salmon, Dungeness crab or sablefish, depending on the season. To commercial fishermen the harbor marks the safe haven after a dangerous journey. For others, today offers a rare boating adventure – a chance to picnic, take photos and crack open a beer before noon.


But today is about more than just socializing. It’s day two of the 45th annual Bodega Bay Fisherman’s Festival and time for the annual Blessing of the Fleet, a centuries-old tradition which began in predominantly Catholic, Mediterranean fishing communities. According to tradition, a priest or pastor blesses the community’s fishing boats to ensure a bountiful harvest and safe return to the harbor.

Family and friends on board Ogg’s boat the Karen Jeanne. (Rebecca Fanning/Medill)

Dick Ogg’s slender build, kind expression and his smooth, tanned skin makes him appear younger than his 65 years. He estimates that he has attended the blessing for more than 25 years, though he’s lived in Sonoma County for much longer, moving here with his family when he was 7. The retired electrician once used fishing as a way to supplement his income, but now he’s taken to the water full-time.

“I’m always reminded of guys I’ve known who aren’t around anymore. Things happen out at sea.” – Dick Ogg

Ogg tells the story of a friend who was run over in a shipping lane, and another who passed away out at sea. But death is only one kind of tragedy that strikes the area’s fishermen.

In Bodega Bay, the blessing tradition began nearly 60 years ago and marked the start of a once-fruitful salmon season. But as regulators scramble to protect declining salmon populations, the season has become shorter and shorter. The California Fish and Wildlife announced earlier this month that commercial salmon fishing in this area would open late – not until July 26 –  and would run for barely two months. The late start cuts the commercial season in half, and with it the chance to make a living.

“The salmon fishery has been diminished to the point that there’s not enough money to make it through the season,” Ogg says, adding that Dungeness crab is the only fishery remaining that provides close to enough money to support working fishermen in the bay. And even then the owners of boats often can’t afford full-time employees when crab season slows.

“I have some bills that aren’t going away,” says one of the crew members on Ogg’s boat.  He tells me about his fear of a less-than-lucrative salmon season and his plan to seek summer work in Alaska’s more fruitful Bristol Bay or as a tuna fisherman in his native Atlantic waters off the east coast.

He says he’s not planning to wait to find out how the salmon yield. He’s already contacted several commercial fishing vessels in hopes of hopping aboard.

For now Pacific salmon join red abalone and Pacific halibut on the list of closed California fisheries. This year marks the first-ever closure for recreational red abalone, though the commercial fishery has been closed since 1996 and other abalone species placed on endangered species lists.


Right now, Ogg is fishing for black cod, a sustainable white fish often called sablefish, considered a best choice or good alternative by the Monterey Bay Aquarium’s seafood watch. But black cod quotas are limited, and the real money still comes from Dungeness crab, a declining industry.

As the boat turns the bend, dense waves crash against Bird Rock, a local landmark named for the persistent birds that land on its surface, their white waste leaving a kind of organic graffiti on the gray stone. The skies are a brilliant blue, but dark clouds linger at their edges, a reminder of the dangers that lurk in open oceans.

Out on the water the harbormaster radio announces the start of the ceremony. The priest leans over a woven flower wreath and the prayers begin.

On board the Karen Jeanne, the crew goes silent, necks craned as all listen to the Lord’s Prayer, reminders of fishermen past and a few references to Jesus and his admiration for fishermen.

Ogg steers the boat closer to the action. “I could use all the blessing I can get,” he says.

As storm clouds cover the sun and boats speed back to the safety of the harbor, the priest blesses each boat, scattering holy water from a gold chalice into the salty air. Before he’s fully docked, raindrops speckle Ogg’s glasses and guests duck into the cabin, reminded of the uncertainty of nature and life on the water.

Photo at top: Fisherman Dick Ogg steers his boat the Karen Jeanne to the Blessing of the Fleet ceremony on Bodega Bay. (Rebecca Fanning/Medill)

Go solo or find a partner: When a startup needs a co-founder

By DeForest Mapp
Medill Reports

Today’s startup inventor often brings revelation to fruition by returning home from a fulltime job to start a second life. The inventor may catch a few hours sleep, push forward on design in pajamas until 4 a.m., get a little more sleep, show up for work and do it all over again.

For an entrepreneur in the tech space, this is living the life, according to an article from the U.S. Bureau of Labor and Statistics’ Career Outlook. But every founder goes through a series of life-changing steps needed to build a successful startup. While some steps revolve around people and establishing culture, the startup is equally hinged upon a good idea that solves a problem.

“Before you build something that nobody gives a shit about, why don’t [you] go back, make sure that we really understand the problem that we’re solving, that you’ve got a customer that cares enough to pay you for it,” said Billy Banks, associate program director of the Garage at Northwestern University. “If you don’t have that, you haven’t nailed the problem, yet.”

Founders who have spent countless hours designing the look, feel and tone of an experience, app or invention cannot believe what they have. That said, the next crucial steps include building a team, finding resources and hopefully scaling the business. According to an article on TechCrunch, there’s at least one way a founder can streamline that process – bring on a co-founder. The new partner may lack  business acumen but could work to pick up the skills or fill a gap as the tech whiz.

Paige Edmiston encourages healthcare startups to apply to MATTER, a non-profit and no-equity collaborative based in Chicago.

“We offer workshops in business [for our founders],” said Paige Edmiston, marketing manager of MATTER. “It’s really hard… there’s so much complexity [in a startup] that very few people know everything they need to know.”

Bringing equity to a startup, without diluting it, should come with a price, according to another TechCrunch  article. Skill sets such as programming, designing and JavaScript all seem easy enough – that is until a non-technical founder actually starts spending time in those environments. They will quickly learn they’re better off hiring someone else.

“The best way to hide your imperfections is to keep it simple,” said Scott Kitun, CEO of Technori. “It is much better to go into a little bit of debt… to hire the right person that does the job exceptionally well and faster and more efficiently than you, as a founder, spending your time doing something you’re not great at.”

Finding this kind of coveted type of talent might be easier if the founder lived somewhere near the Mission District in San Francisco, for example. It might be nice if a Bumble app existed just for technical and non-technical founders, allowing users to swipe left and right until a match is found. But until someone recognizes this as a problem, The Meetup app will do just fine.

“If you’re young, and you want to be in tech, your best bet is probably to go to SF because you can get a bunch of roommates, eat [obscenity] food and you can make it work in San Fran,” said Banks.

While twenty-something software developers in the Bay Area play the field and hold out for as much money as possible, the eager startup founder might consider relocating to Chicago, another hub for successful startups such as Groupon.

” [This] is why [you have] companies like Google and Facebook hiring more people here,” said Banks. “That’s why you have Amazon considering Chicago as a place to put their [headquarters], too.”

But even if the founder brings the startup to Chicago and finds it more affordable, he or she may face a potential dilemma. If the startup does not find a chief technology officer, it will more than likely not receive any rounds of capital from potential investors until this team member and a product is in place.

“You really have to have the business-model figured out of who’s going to pay for [the product],” said Edmiston. “Not only [having] a promising product and business model [is essential], but [we] also have [to have] confidence in the vision of the founder and the early-leadership-team.”

After months of searching and courting the right technical co-founder, the founder offers a candidate a partnership role, all contingent on his or her ability to deliver on a minimum viable product (MVP). And in exchange, the new startup is now defined by the efforts of two co-founders, partners in a new dream company.

The candidate accepts, thanks the founder and immediately begins assisting in building their future. But now the senior co-founder may start to anticipate how angel investors, venture capitalists and private equity firms receive the new team and idea-in-development.

“As you go into these meetings, you’re going to hear no a lot,” said Banks. The word no is “just an opportunity to ask a follow-up question and understand what the no is, so that when you get the next meeting, you’re starting to figure out how to overcome objections.”

The Startup Cycle and the Investment Stages: (DeForest Mapp/MEDILL)
Photo at top: A startup founder seeks a co-founder. (DeForest Mapp/MEDILL)


In Chicago, Apple unveils faster, cheaper iPad for students

By Ang Gao
Medill Reports

Apple is returning to school with a new iPad and enhanced educational resources.

The new iPad costs $299 for educators and students, but $329 for everyone else, the same price as that of the iPad released last year. Unveiled at Chicago’s Lane Tech College Prep High School on Tuesday, with Apple CEO Tim Cook on hand, the new iPad boasts increased online storage for students of 200 GB, up from 5 GB, on its A10 fusion chip, with a faster speed and 10-hour battery life.

Tim Cook spoke at the event about Apple's educational efforts.
Apple CEO Tim Cook spoke at the event about Apple’s educational efforts.(Ang Gao/MEDILL)

The new iPad works with Apple Pencil, which previously could be used only with the expensive iPad Pro. The new stylus, Logitech Canyon, costs $49 for students, and may also be applied to iWork, including Numbers, Pages and Keynote.

“We deeply care about education,” Cook said, linking technology to the liberal arts. Continue reading

How college friends built a $100 million blockchain business

By Ang Gao
Medill Reports

When China banned initial coin offerings, or ICOs, in September last year, a number of Chinese blockchain projects started looking for ICO opportunities abroad but encountered difficulties including foreign regulations, legal issues and language.

That was when Minhui Chen, who graduated from Columbia University in 2015 and was working as a consultant at Ernst & Young, sensed an opportunity.

“We saw a huge demand for consulting business at that time,” Chen said. “There were plenty of good Chinese projects with good technologies but lacked overseas experience.”

Global Blockchain Innovative Capital, or GBIC, founded by Chen and two friends from Columbia, started consulting for these projects and helping them connect with overseas cryptocurrency exchanges, investors and legal consultants. They also helped them in building token communities and expanding overseas.

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A neckwear business rooted in China prospers in Chicago

By Charlene Zhang
Medill Reports

“My daughter was given a Harvard logo shirt a decade ago by the school president, when Becky’s father Arnie mentioned me as the Harvard logo tie manufacturer in China,” said Michael Yin, the proud Chinese supplier of custom-made neckwear for Shop4Ties, a Chicago wholesaler and distributor.

Shop4Ties was founded in 1982 by Arnie Kapp, who quit his job at a tie shop on Michigan Avenue and started the business in a basement.

Becky Galvez, Kapp’s daughter, joined the company in 2011 after teaching Spanish at an international school, and took the reins as CEO with her mother Rhonda Kapp as chief financial officer in 2014 after Kapp passed away from colon cancer.

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FHFA House Price Index up 0.8 percent in January

By Charlene Zhang
Medill Reports

Single-family house prices rose in January 0.8 percent from December, according to the Federal Housing Finance Agency’s seasonally adjusted House Price Index. The rise beat the forecast of a 0.4 percent increase.

From January 2017 to January 2018, house prices rose 7.3 percent, also beating the forecast, of 6.5 percent.

“Home prices have been on an uptrend for a number of years now. The main reason is there are not a lot of inventories available for sale,” said Tendayi Kapfidze, the chief economist at LendingTree, an online brokerage headquartered in North Carolina.

Historical data suggest demand has been normal, but the shortage of supply has played a bigger impact in both new home and existing home markets, according to Kapfidze. He explained, “Home builders haven’t ramped up the production to the level of they were prior to the crisis. There were also difficulties of finding land; cities have regulations on specific types of house one can build.”

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Wrigleyville memorabilia shop brings history to life

By Sarah Foster
Medill Reports

Tom Boyle can’t help but poke through his shelves. He’s in search of a movie poster that only he can visualize. It’s somewhere among the newspaper clippings, the vinyl records, the buttons and the books.

“Let me see,” he says, furrowing his brows and shuffling through his inventory.

After searching for a few minutes himself, he sends his colleague over to the other corner of the store, hoping he can help find it. Poking and prodding through the posters, the pair finally pull it out of the pile: “A Stratton Story.” Their eyes glance over the picture depicting the 1949 film about an injured baseball player. They notice the faded red-and-white hues and the way James Stewart embraces June Allyson.

“This is it,” Boyle says with a smile.

But they weren’t searching through their inventory for fun. They were hoping to retrieve the poster for a customer, who has the same last name as Stewart’s character.

“It’s like finding a home for abandoned children,” Boyle said. “When we can find a good home for these items, it makes us happy.”

Intimate customer service and an ability to provide rare items from the past are exactly how Boyle’s store, a memorabilia shop called Yesterday, has managed to stay open for 42 years.

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ChiHuo Chicago builds a bridge between foodies and restaurants

By Minghe Hu
Medill Reports

ChiHuo means foodie in Mandarin, and a two-year-old online promoter of Chinese food called ChiHuo Chicago has a growing following in the Chinese community. It’s one of nine such ventures around the country operated by Chinese parent ChiHuo.

As a startup, ChiHuo Chicago has grown from a personal social medium to an online social influencer platform with 300,000 subscribers in Chicago. And its user base is expanding to English speakers.

Photo at top: Foodie Map of ChiHuo Chicago.(Minghe Hu/MEDILL)

Cboe outlook just fine despite VIX-related angst, analysts say

By Minghe Hu
Medill Reports

As inverse-VIX trading dried up during the stock market’s 10-percent correction in February, shares of VIX originator Cboe Global Markets Inc. plummeted a startling 18 percent. But, buoyed by reassuring words from Cboe’s chief executive officer, the high-flying stock partially recovered and the exchange’s outlook remains solid for 2018 in the eyes of analysts.

CEO Richard Tilly, in a conference call as the market bottomed out, pointed out that Cboe’s revenues from inverse-VIX products account for only 5 percent of total VIX futures revenues. The VIX, or volatility index, rose sharply and volume boomed as the market peaked and plummeted, but trading in the VelocityShares Daily Inverse VIX Short-Term ETN (NYSEARCA: XIV) and ProShares Short VIX Short-Term Futures ETF(NYSEARCA: SVXY) collapsed.

Chief Strategy Office John Deters added that “people did not flee the short-VIX strategy.”

He went on: “Buy side users are coming into the VIX market that generates activity from the market-maker community in a ratio of about 3:1. So every new contract that comes in from a customer, spins up three new contracts from market-makers approximately. And that’s the kind of benefit of having more participants doing more business in the VIX futures markets.”

Richard Repetto, an analyst at Sandler O’Neil & Partners LP said in an interview via phone this week, “I think they will continue to grow and powered by proprietary products, and the technology platform migrations [from Cboe’s 2017 acquisition of the BATS stock exchange] will help them as well. Their stock grew dramatically last 15 days,” suggesting that the further appreciation in the near future is unlikely. The price/earnings ratio of Cboe stock is still a lofty 44.93, far above the S&P 500 trailing P/E ratio of 25.68.

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