• Next year should be a good one for Apple's stock, said Gene Munster, a managing partner at Loup Ventures.
• The company's shares should outperform its peers among the most widely watched big tech companies, said Munster, a longtime Apple analyst.
• The changes the company is making to its financial reporting, and a new upgrade in wireless technology, should help boost its stock, he said.

This year had been a tough one for Apple. But things could get a whole lot better for the company in 2019.

Apple's stock is well positioned to outshine its peers among the big tech companies, said Gene Munster, a managing partner at Loup Ventures and a longtime tech stock analyst.

Changes in the way Apple reports its financial results, in the regulatory landscape, and in wireless technology will all benefit the company in the coming year, allowing it to distance itself from the other companies in the group of FAANGs — Facebook, Amazon, Apple, Netflix, and Google parent Alphabet — he said. 

"Apple will be the best performing FAANG stock in 2019," Munster said as part of a blog post laying out Loup's predictions for the tech industry for the coming year. 

That would be a welcome relief for the company's investors. Despite a rebound on Wednesday, Apple's stock is down 5.7% in the year to date and has underperformed the broader market as well as all of its big-tech peers except for Facebook.

Apple's reporting changes could be a good thing for its stock

Part of what has worried investors of late has been the company's iPhone sales. The company sold fewer smartphones than Wall Street expected in its most recent quarter, and the number it sold in its most recent fiscal year was barely more than in sold in its previous year. 

Adding to those concerns, the company announced last month that starting next year it would stop disclosing the number of iPhones it sells each quarter. Many investors and analysts interpreted that announcement as a sign that the company believed its smartphone sales would start to decline. 

But Munster thinks the changes Apple is making to its financial reporting will benefit the company and its stock by focusing investors attention on its overall revenue and earnings growth, rather than on how many iPhones it sells each quarter.

The changes should also highlight the growing importance of Apple's services business, he said. That business promises to be more profitable than its device sales. As investors start to focus on that business, they should start to accord Apple a higher price-to-earnings multiple that takes into account the services segment's growth and profit potential, he said. 

"We believe the theme of Apple as a Service will slowly take root in 2019," Munster said. 

Read this: Investors focused on Apple's disappointing iPhone sales are missing the company's hidden goldmine

Apple's going to benefit from not being Facebook or Google 

Apple will also benefit from simply not being Facebook, Google, and Amazon, he said. All three of those companies are facing increasing regulatory scrutiny over their data-collection practices and market dominance. Munster's Loup colleague, Doug Clinton, forecasts that the US will pass a data privacy law next year that will constrain Facebook and Google in particular. Such a prospect could hinder their stocks, but likely would have little affect on Apple, whose business model is not built around similar data collection.

"Facebook, Google, and Amazon will be facing regulatory headwinds," Munster said.

The iPhone maker could also benefit from the wireless industry's latest technological evolution. Carriers are starting to roll out their 5G — or fifth generation — networks, which promise much faster speeds and much greater capacity.

Investors are going to get excited about 5G

Apple isn't expected to roll out its first 5G phones until 2020 at the earliest. But investors will likely start getting excited next year about what the new technology will mean for the company's future smartphone sales. That's because the ability to connect to the fast new networks will be big deal for the company's customers, Munster said. 

"5G will be the biggest new iPhone 'feature' since the larger-screen iPhone 6 in 2014," he said.

The release of that phone spurred record unit sales for Apple that the company has yet to surpass.

A big year next year isn't a sure thing for Apple, of course. An economic downturn would hit the company just like many others, Munster acknowledged. Even so, he still think the company will stand out from the pack.

"If there's a prolonged slowdown, it will be negative for shares of AAPL, but we would still expect Apple to 'outperform' the rest of FAANG," he said. 

• Read more about Apple, the tech stocks and 5G:
• A top tech analyst is betting on a rebound, not a recession, and says these stocks are his best bets after the market's correction
• A longtime investor shares his 3 picks for tech stocks to bet on in these tough times for the market
• 5G wireless service is coming, but don't expect it to super-charge your smartphone's internet anytime soon
• These 5 charts show why Apple's big bet on services just doesn't make any sense

SEE ALSO: An Amazon bull says the company's stock is his 'best idea' for 2019. Here's why.

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This is a preview of a research report from Business Insider Intelligence, Business Insider's premium research service. To learn more about Business Insider Intelligence, click here. Current subscribers can read the report here.

Smart speakers comprise one of the fastest-growing device segments in the consumer technology market today. Ownership levels have nearly doubled from early 2017 to summer 2018. 

With this rapid growth, there are a few pivotal questions that both companies looking to develop and sell smart speakers as well as those looking to sell products, deliver media, and offer access to services like banking over these devices need answers to in order to craft successful strategies. In particular, they need to know who is and isn’t buying smart speakers, and what consumers who own smart speakers are actually doing with them. 

To offer these stakeholders insight, Business Insider Intelligence asked more than 500 US consumers about their knowledge of smart speakers, the devices they do or don’t own and what led them to their purchase decisions, as well as the tasks they’re using their smart speakers for.

In this report, Business Insider Intelligence will look at the state of the smart speaker market and outline how each of the major device providers approaches the space. We will then focus on the key factors that affect whether or not someone owns one of these devices. Next, we will use our survey data to outline the reasons why people don’t own devices in order to offer guidance for who to target and how. Finally, we will discuss what consumers are actually doing with their smart speakers — specifically looking at how the devices are used and perceived in e-commerce, digital media, and banking — which can help companies determine how well they’re publicizing their smart speaker services and capabilities.

The companies mentioned in this report are: Amazon, Google, Apple, Samsung, Facebook, Sonos, LG, Anker, Spotify, Pandora, Grubhub, Netflix, Hulu, Instagram, Snap.

Here are some key takeaways from the report:

• Despite their growing popularity, nearly half of respondents still don't own a device — which presents a long runway for adoption. Our survey data reveals a number of key factors that impact whether or not someone owns one of these devices, including income, gender, and age.
• Smart speakers are establishing themselves as a key platform for e-commerce, media, and the smart home.
• The introduction of a screen to some smart speakers will expand the possibilities for companies developing for the device — but developers will need to resist the compulsion to use speakers to accomplish too much.

In full, the report:

• Provides an overview of the key players and products in the smart speaker market.
• Highlights critical adoption rates broken out by key factors that define the segment.
• Identifies how consumers are using devices in important areas where companies in various industries are trying foster greater use of the voice interface.

Join the conversation about this story »

This is a preview of a research report from Business Insider Intelligence, Business Insider's premium research service. To learn more about Business Insider Intelligence, click here.

What is eSports? History & Rise of Video Game Tournaments

Years ago, eSports was a community of video gamers who would gather at conventions to play Counter Strike, Call of Duty, or League of Legends.

These multiplayer video game competitions would determine League of Legends champions, the greatest shooters in Call of Duty, the cream of the crop of Street Fighter players, the elite Dota 2 competitors, and more.

But today, as the history of eSports continue to unfold, media giants such as ESPN and Turner are broadcasting eSports tournaments and competitions. And in 2014, Amazon acquired Twitch, the live streaming video platform that has been and continues to be the leader in online gaming broadcasts. And YouTube also wanted to jump on the live streaming gaming community with the creation of YouTube Gaming.

eSports Market Growth Booming

To put in perspective how big eSports is becoming, a Google search for "lol" does not produce "laughing out loud" as the top result. Instead, it points to League of Legends, one of the most popular competitive games in existence. The game has spawned a worldwide community called the League of Legends Championship Series, more commonly known as LCS or LOL eSports.

What started as friends gathering in each other's homes to host LAN parties and play into the night has become an official network of pro gaming tournaments and leagues with legitimate teams, some of which are even sponsored and have international reach. Organizations such as Denial, AHQ, and MLG have multiple eSports leagues.

And to really understand the scope of all this, consider that the prize pool for the latest Dota 2 tournament was more than $20 million.

Websites even exist for eSports live scores to let people track the competitions in real time if they are unable to watch. There are even fantasy eSports leagues similar to fantasy football, along with the large and growing scene of eSports betting and gambling.

So it's understandable why traditional media companies would want to capitalize on this growing trend just before it floods into the mainstream. Approximately 300 million people worldwide tune in to eSports today, and that number is growing rapidly. By 2020, that number will be closer to 500 million.

eSports Industry Analysis - The Future of the Competitive Gaming Market

Financial institutions are starting to take notice. Goldman Sachs valued eSports at $500 million in 2016 and expects the market will grow at 22% annually compounded over the next three years into a more than $1 billion opportunity.

And industry statistics are already backing this valuation and demonstrating the potential for massive earnings. To illustrate the market value, market growth, and potential earnings for eSports, consider Swedish media company Modern Times Group's $87 million acquisition of Turtle Entertainment, the holding company for ESL. YouTube has made its biggest eSports investment to date by signing a multiyear broadcasting deal with Faceit to stream the latter's Esports Championship Series. And the NBA will launch its own eSports league in 2018.

Of course, as with any growing phenomenon, the question becomes: How do advertisers capitalize? This is especially tricky for eSports because of its audience demographics, which is young, passionate, male-dominated, and digital-first. They live online and on social media, are avid ad-blockers, and don't watch traditional TV or respond to conventional advertising.

So what will the future of eSports look like? How high can it climb? Could it reach the mainstream popularity of baseball or football? How will advertisers be able to reach an audience that does its best to shield itself from advertising?

Business Insider Intelligence, Business Insider's premium research service, has compiled an unparalleled report on the eSports ecosystem that dissects the growing market for competitive gaming. This comprehensive, industry-defining report contains more than 30 charts and figures that forecast audience growth, average revenue per user, and revenue growth.

Companies and organizations mentioned in the report include: NFL, NBA, English Premier League, La Liga, Bundesliga, NHL, Paris Saint-Germain, Ligue 1, Ligue de Football, Twitch, Amazon, YouTube, Facebook, Twitter, ESPN, Electronic Arts, EA Sports, Valve, Riot Games, Activision Blizzard, ESL, Turtle Entertainment, Dreamhack, Modern Times Group, Turner Broadcasting, TBS Network, Vivendi, Canal Plus, Dailymotion, Disney, BAMTech, Intel, Coca Cola, Red Bull, HTC, Mikonet

Here are some eSports industry facts and statistics from the report:

• eSports is a still nascent industry filled with commercial opportunity.
• There are a variety of revenue streams that companies can tap into.
• The market is presently undervalued and has significant room to grow.
• The dynamism of this market distinguishes it from traditional sports.
• The audience is high-value and global, and its numbers are rising.
• Brands can prosper in eSports by following the appropriate game plan.
• Game publishers approach their Esport ecosystems in different ways.  
• Successful esport games are comprised of the same basic ingredients.
• Digital streaming platforms are spearheading the popularity of eSports.
• Legacy media are investing into eSports, and seeing encouraging results.
• Traditional sports franchises have a clear opportunity to seize in eSports.
• Virtual and augmented reality firms also stand to benefit from eSports.  

In full, the report illuminates the business of eSports from four angles:

• The gaming nucleus of eSports, including an overview of popular esport genres and games; the influence of game publishers, and the spectrum of strategies they adopt toward their respective esport scenes; the role of eSports event producers and the tournaments they operate.
• The eSports audience profile, its size, global reach, and demographic, psychographic, and behavioral attributes; the underlying factors driving its growth; why they are an attractive target for brands and broadcasters; and the significant audience and commercial crossover with traditional sports.
• eSports media broadcasters, including digital avant-garde like Twitch and YouTube, newer digital entrants like Facebook and traditional media outlets like Turner’s TBS Network, ESPN, and Canal Plus; their strategies and successes in this space; and the virtual reality opportunity.
• eSports market economics, with a market sizing, growth forecasts, and regional analyses; an evaluation of the eSports spectacle and its revenue generators, some of which are idiosyncratic to this industry; strategic planning for brand marketers, with case studies; and an exploration of the infinite dynamism and immense potential of the eSports economy.

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• Supreme Court Justice Ruth Bader Ginsburg has been released from hospital following cancer surgery, Reuters reports
• A spokeswoman for the court, Kathy Arberg, says that Ginsburg is now recuperating at home.
• On Monday, Associated Press reported that 'RBG' was up and working just a few days after undergoing surgery for lung cancer.
• The 85-year-old Ginsburg will be home in time to watch the newly released feature film “On the Basis of Sex,” released this week which follows some of her notable early battles and achievements. 

Supreme Court Justice Ruth Bader Ginsburg is back at home after being released from hospital following cancer surgery, Reuters reports

A spokeswoman for the court, Kathy Arberg, says that Ginsburg is recuperating at home.

On Monday, Associated Press said that Ginsburg was up and working some 72 hours after surgery for lung cancer.

“Justice Ginsburg was discharged from the hospital yesterday and is recuperating at home,” Arberg said in a statement, Wednesday.

It was only on Friday that the famously durable 85-year-old US supreme court justice underwent surgery to remove two malignant growths in her left lung. 

Doctors found no evidence of disease elsewhere in her body after the pulmonary lobectomy, and no further treatment is planned, according to an earlier court statement.

READ MORE: Ruth Bader Ginsburg has been a Supreme Court Justice for 25 years — here's a look at the trailblazer's life and career

Ginsburg was only just hospitalized in November after she fractured several ribs in a fall. It was while she was being treated for those injuries that doctors identified two nodules in the lower lobe of her left lung.

Ginsburg’s health has been an ongoing preoccupation for Democrats across the country in recent years. The court’s conservative-to-liberal ratio is now 5-4 after President Donald Trump appointed justices Neil Gorsuch and Brett Kavanaugh to the seats vacated by the late Justice Antonin Scalia and retired Justice Anthony Kennedy.

Ginsburg, adored by the left for her dour aspect and apparently indomitable stamina was appointed to the country's highest court back in 1993 when then Democratic President Bill Clinton was still yet to have "sexual relations with that woman." 

A feature film about her life, “On the Basis of Sex,” with Felicity Jones in the lead role made its debut in US theaters this week.

The movie also stars Arnie Hammer, Justin Theroux, Sam Waterston and Kathy Bates.

This documentary, simply titled "RBG," was released earlier in 2018.

Reuters says that President Donald Trump could replace an ailing Ginsburg with another handpicked conservative, adding to the two conservative justices he has added to the court since his innauguration in January 2017.

A potential 6-3 conservative court count in favor of GOP-leaning justices would have "major consequences for issues including abortion, the death penalty, voting rights, gay rights and religious liberty," according to Reuters.

In a career of extraordinary endurance, Ginsburg has reportedly never missed a day of oral arguments in the 25 years she has spent on the court, despite her numerous health scares.

The nodules are Ginsburg’s third encounter with cancer, after being treated for colorectal cancer in 1999 and pancreatic cancer in 2009, according to National Public Radio.

The court will next meet on January 7.

SEE ALSO: Ruth Bader Ginsburg underwent surgery to remove cancerous growths from her lung, Supreme Court announces

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NOW WATCH: The world's largest cruise ship just landed in Miami — here's what it's like on board

• Republican state Sen. Michael Williams was accused of lying to Georgia authorities about his whereabouts when he reported that his campaign office in Gainesville was burglarized in May.
• Williams reportedly said he was at home when about $300,000 worth of computer servers were allegedly stolen.
• His former campaign manager described the indictment as a "political witch hunt."
• Williams made headlines during his campaign for governor in Georgia by driving a bus dubbed the "deportation bus," the outside of which was covered with controversial messages.

The Georgia Republican state senator who steered his controversial campaign for governor with a "deportation bus" was jailed Wednesday after he was indicted on insurance-fraud charges and other crimes.

Michael Williams turned himself in on Wednesday, according to the Atlanta Journal-Constitution. He is accused of lying to Georgia authorities about his whereabouts when he reported that his campaign office in Gainesville was burglarized in May.

Williams reportedly said he was at home when around $300,000 worth of computer servers at his office were allegedly stolen. The machines, according to Williams' former campaign manager, Seth Weathers, were used for mining cryptocurrency, the Atlanta Journal Constitution reported.

Weathers described Williams' indictment as a "political witch hunt."

The indictment did not mention what ultimately happened to the servers, according to the Journal-Constitution. Williams' attorney said his client is expected to leave jail "soon" after posting bond and said he "looks forward to his day in court."

"It is a one-sided story presented to a group of people," attorney AJ Richman reportedly said of the indictment, "with the accused being unable to respond."

Williams, who placed last among five Republican gubernatorial primary candidates, briefly grabbed headlines after he hit the campaign trail with his "deportation bus tour." The gray-colored bus was covered in several controversial signs, including "FOLLOW ME TO MEXICO," and "FILL THIS BUS WITH ILLEGALS."

"We're not just gonna track 'em, watch them roam around our state," Williams said, referring to undocumented migrants, in a campaign video. "We're going to put 'em on this bus and send them home."

"If you're as tired as I am with politicians that do nothing but talk, and you want to see this bus filled with illegals? Vote Michael Williams," he said.

SEE ALSO: Trump-backed Republican who allegedly shared questionable content about 'Bigfoot' on social media won a House seat in Virginia

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NOW WATCH: Anthony Scaramucci claims Trump isn't a nationalist: 'He likes saying that because it irks these intellectual elitists'

• With the rapid spread of marijuana legalization in the US, big law firms are discovering that the tangled web of regulations guiding the rapidly growing industry is a boon for business.
• As cannabis companies grow, merge, and start getting the attention of Fortune 500 corporations as acquisition targets, they need more sophisticated advice.
• Numerous big law firms have built out specialized cannabis practice groups to serve the nascent industry.

When Joshua Horn and his wife traveled to Colorado about five years ago, they thought they'd check out one of the state's new marijuana dispensaries for fun.

"The 'budtender' says, 'What I can do for you?'" Horn, the cochair of Fox Rothschild's Cannabis Law Practice, told Business Insider in an interview. "We actually didn't buy anything — we just wanted to see what one of these looked like."

After the two left Colorado and returned home to Philadelphia, Horn's wife said he should think about cannabis law as Pennsylvania began moving toward legalizing medicinal marijuana.

Read more: Big asset managers like BlackRock are sitting on the sidelines of the $75 billion US marijuana industry because of one big pain point

"Five years later, I'm the cochair of a national cannabis practice," Horn said. "And we have clients all over the world."

With the rapid spread of marijuana legalization in the US, once reluctant big law firms are discovering that the tangled web of regulations guiding the rapidly growing industry is a boon for business.

Following the midterm elections, some form of cannabis is now legal in 33 states, and many in the industry say it's only a matter of time before legalization sweeps the nation.

And big money, naturally, has followed.

From boutiques to big law

As cannabis companies grow, merge, and start getting the attention of Fortune 500 corporations as acquisition targets, they need more sophisticated advice on financing, tax planning, and corporate structure.

"It's one of the few emerging markets with a multibillion-dollar potential," said Seth Goldberg, a partner at Duane Morris who heads up the firm's cannabis practice.

While some boutique firms have served the cannabis industry since Colorado legalized the drug in 2012, most small law shops may not be able to negotiate complicated joint ventures or merger agreements, lawyers say.

For Christopher Barry, a longtime capital-markets lawyer who is the chair of Dorsey & Whitney's Canada Practice Group, that's exactly what piqued his interest.

A few years ago, Barry, who's based in Seattle, picked up the phone and had a representative of a multibillion-dollar Asian investment group on the line.

The representative said he was looking at evaluating marijuana investments in the US. But when he went to the fund's regular counsel — a large, white-shoe law firm — the firm turned them down.

"So the person said, 'We did a bunch of research about who could do the work and who could provide the level of service we're used too,'" Barry said. "Well, that got my attention."

Since then, Dorsey has built up a cannabis practice group across its offices in Denver, Seattle, and Toronto, with about 20 to 25 lawyers.

Barry has since helped well-known US cannabis companies like MedMen and Green Thumb Industries execute cross-border mergers — in these instances, firms that went public in Canada by merging with a publicly traded shell company.

The market for these cross-border mergers is red-hot. According to data from Dealogic, the number of US companies pursuing reverse mergers in Canada has more than doubled in the past five years, to over 16 this year from just 7 in 2013, with cannabis companies leading the charge.

Read more: Marijuana companies are using a 'backdoor' strategy to tap the public markets — and it's fueling an M&A boom

Ben Reznik, a partner at the Los Angeles-based Jeffer Mangels who has spent much of his career working on land-use issues, said he started taking work from cannabis companies in Southern California on an "ad hoc" basis.

Many partners at his firm, however, were reluctant to get in with the specter of federal illegality hovering over the industry. "So we didn't jump right into this by any means," Reznik said. He said that as the firm debated the issue internally, about 10% of the partners were "naysayers."

"They were more about, why take the risk?" Reznik said. "Do we really want to do that?" Ultimately, Reznik said Jeffer Mangels was an "entrepreneurial firm."

"There was just a tremendous need for our services," Reznik said. Now, like Dorsey, the firm earlier this year established a cannabis group.

Getting in on the ground floor of a global industry

For younger lawyers, cannabis is a way to get in on the ground floor of what is set to be a global industry.

Neeraj Kumar, a New York-based associate at Duane Morris, started his career as a corporate-securities lawyer around partners who had been practicing law for over 20 years.

Because cannabis is such a new industry — no lawyers have more than five or six years of experience in the field — "it definitely presents a unique opportunity to be a thought leader," Kumar said.

"At least in my career, there hasn't really been an industry with that opportunity," he said.

Rachel Gillette, a Denver-based partner at Greenspoon Marder, was one of the earliest practitioners of cannabis law.

In 2010, right when Colorado first started regulating medical marijuana, she quit her job as a tax attorney. "I borrowed a little money from my mom and started my own practice focusing only on representing cannabis businesses," Gillette said. "I was probably one of the first attorneys in the nation to do something like that at the time."

When she emailed her favorite law professor to tell her about opening her own practice, her professor responded curtly: "She was like: 'You're going to be disbarred.'"

Fast forward to 2018, Gillette is now a partner at Greenspoon Marder. That same professor recently reached to invite Gillette to teach a class on cannabis law.

"A few years ago, you couldn't find a large law firm to touch the area with a 10-foot pole," Gillette said. "But now I'm cool."

'More fun than a barrel of monkeys'

While many law firms have quickly built up cannabis practices, the biggest white-shoe firms aren't quite there yet. Some of the lawyers Business Insider spoke with speculated that some big firms might steer clear purely for reputational reasons.

Others said it's not worth the risk for firms with blue-chip clients.

It boils down to this: Recreational marijuana isn't yet legal in New York state, where most of the largest firms are headquartered. Though that may change in 2019, the cannabis industry may still be too small for the largest firms to take the risk of dealing with an industry that's federally prohibited, the lawyers said.

Read more: Beverage giants like Heineken and Constellation Brands are duking it out in the billion-dollar market for marijuana-infused drinks

But if the federal government removes cannabis from the list of controlled substances — or if Congress passes legislation like the bipartisan States Act — then "the floodgates will open," Reznik said.

"I think there'll be a flood of lawyers getting into the field at that point," Reznik said. "It'll be a free-for-all." And when that happens, those who are already experts in the field hope they'll have the first-mover advantage.

In any case, being at the forefront of a brand-new, exciting field is just plain fun.

"This is more fun than a barrel of monkeys," said Barry, the Dorsey & Whitney partner. "Look, I'm 71 years old. I've been practicing for over 40 years — if I weren't having so much fun with this, I'd be retired."

• Read more:
• These execs are leaving behind careers at companies like Coke and Victoria's Secret to tap into the $194 billion marijuana industry
• A marijuana-focused investment firm started by a pair of Wall Street veterans just closed a $55 million fund
• A cannabis CEO who led turnarounds at FAO Schwarz and Patagonia explains why he's looking to poach 'nimble' people from small companies — rather than big-name execs

SEE ALSO: The top 12 venture-capital firms making deals in the booming cannabis industry that's set to skyrocket to $75 billion

Join the conversation about this story »

NOW WATCH: The legendary economist who predicted the housing crisis says the US will win the trade war

• Although some animals may appear harmless or even cute, they can be powerful creatures with a potentially harmful or fatal ability to attack others. 
• For example, brown bears and polar bears can be fierce attackers.
• Tasmanian devils are also known for being quite ruthless at times. 

With soft fur, pretty colors, and big eyes, many creatures can strike humans as cute and cuddly. However, some animals are more vicious than they look. Whether in acts of self-defense or seemingly unpredictable rage, some animals can fight back with strong bites, sharp claws, and sneaky attacks. 

In general,  you should avoid trying to touch or pet any creature in the wild if you don't know how your presence will influence its behavior. And you may want to be especially cautious of the creatures below. 

Here are 10 cute animals that can deliver pretty powerful attacks or carry dangerous diseases, making them more dangerous than you might think. 

SEE ALSO: 10 cute animals you didn't know were cannibalistic

Male platypuses have poisonous spurs.

The platypus may look harmless, but scientists have found that male platypuses can be dangerous.

The males typically have sharp spurs on the heels of their feet. These spurs contain venom with 83 venom-related genes. The genes are similar to those of other animals like snakes and spiders. Although the venom can be deadly to some creatures, it generally can't kill humans.

Brown bears will attack when provoked.

Brown bears are known for being protective of their young. According to National Geographic, they will attack if provoked. If their enormous bodies and teeth aren't threatening enough, their speed certainly is: they can run as fast as 30 miles per hour, making them difficult to escape.

Wolves have sharp teeth.

With its sharp teeth, territorial howls, and an enormous appetite, the gray wolf is one of the fiercest predators in the Northern Hemisphere. According to National Geographic, A single wolf can eat up to 20 pounds of meat in one sitting. Traveling over 20 miles a day in packs of six to 10, wolves often work together to take down enormous prey like elk and moose.

• Stocks fell Thursday, reversing after the best day for the major averages in nearly a decade.
• Equities are on track for their worst month since the 1930's.
• Watch the US indexes trade in real time here.

Stocks fell Thursday as concerns about political turmoil in Washington and trade tensions continued to weigh on investors, upending Wednesday's rally that had led Wall Street to its largest percentage gains in nearly a decade.

The Dow Jones Industrial Average fell 1.8%, or about 400 points, a day after climbing more than 1,000 points to post its best daily point increase on record. The S&P 500 and the Nasdaq Composite each dropped 1.7%. Even after Wednesday's jump, a series of sharp sell-offs have put stocks on track for their worst month since the Great Depression.

"Buying sentiment towards global equity markets skyrocketed yesterday due to an apparent return of risk appetite and rebounding oil prices," said Lukman Otunuga, a research analyst at FXTM. "However, with geopolitical risk factors leaving global sentiment extremely fragile, the upside was poised to be limited."

A rally among high-flying technology companies reversed, with Apple and Amazon each shedding more than 2%. Facebook, Alphabet, and Netflix, meanwhile, fell more than 1%.

Oil also pared gains and descended further into a bear market, down more than a third from October highs. West Texas Intermediate was trading at around $45.40 a barrel and Brent just under $54.

Congress was set to reconvene Thursday after a holiday break, the sixth day of a partial government shutdown over border-security funding. Signs of progress remain elusive, however, after President Donald Trump doubled down on demands for his long-promised wall along the southern border.

"The tone and nature of the discourse out of Washington these days (as well as the delivery method itself) has added an extra degree of uncertainty and caution to the markets," Scott Buchta, a strategist at Brean Capital, said in an email. "As the rhetoric becomes more disruptive and dangerous, investors push back by taking risk off the table and wait for the dust to settle."

Adding to uncertainty, Reutersreported Trump is considering an executive order that would block US companies from using equipment from China’s Huawei Technologies and ZTE in the new year. That could stir tensions between the largest economies as they race to settle a trade dispute ahead of a March deadline.

The dollarslumped against a basket of major peers after consumer confidence readings came in below expectations. Treasury yields also fell, with the 10-year down 4.5 basis points to 2.752% and the 2-year 3.2 basis points lower at 2.577%.  

SEE ALSO: The bears are back: skeptics are ready to deflate the biggest post-Christmas US stock rally in a decade

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NOW WATCH: The equity chief at $6.3 trillion BlackRock weighs in on the trade war, a possible recession, and offers her best investing advice for a tricky 2019 landscape

2018 was an eventful year in the finance world. From big hedge funds shuttering, to unicorns (finally) filing for IPOs, to huge transformations in the media and telecom industries. 

So what should we expect in 2019?

Business Insider spoke with a variety of of experts, from high flying money managers to prominent investors to top investment bankers and executives. Here's what they said about the biggest trends next year.

Four top investors gave their best predictions for trends in the asset-management industry

Business Insider talked to four top investors in the asset management industry, including executives from JPMorgan and UBS, to get their predictions for 2019. 

They expect that the new year will bring about a number of changes, including the continued culling of products and better exits for early-stage impact investors. 

Here are their best ideas for what next year might bring.

Top investment bankers talk technology IPOs

Despite crazy market volatility in recent months, 2019 will still be a strong year for technology initial public offerings, according to top technology bankers that Business Insider spoke with.

Tech IPOs could break records in 2019 as US bankers prepare for some of the largest private companies in the world, like Uber, Lyft and Pinterest, to make their stock market debuts.

Here tech bankers share their biggest hopes and fears for 2019.

Here are the hedge fund managers to watch next year

It's been a roller-coaster ride for most hedge funds this year. 

Through the first half of 2018, hedge funds were performing pretty well. But that turned sharply in the third quarter. Market volatility in October and November hit hedge funds hard, and a number of large managers like Jason Karp's Tourbillon Capital Partners and Highfields Capital Partners ended up shutting their funds. 

Business Insider talked to top hedge funds consultants, recruiters, lawyers, and investors, who shared their picks about the managers they'll be watching  closely next year in this tough environment. The list includes notable investors like Steve Cohen, who founded Point72 Asset Management, as well as lesser known managers. 

• Hedge-fund performance slumped while fees were cut in 2018.
• Industry insiders say equity managers, the battle for tech talent, and fee pressure are all coming up daily at hedge funds big and small.
• "It's not a great time to be in the hedge-fund business, relative to other times," said Adam Zoia, CEO of the consulting firm CompIQ.

Headlines about high-profile hedge-fund closures and performance troubles commanded the industry's attention in 2018. A year that started with promise for both established managers and new players quickly tanked after the second quarter's close.

Fees are pushed lower with every new fund launch, and large managers like Dmitry Balyasny's firm laid off large swaths of staff. On top of all the industry pressures, the markets in the fourth quarter lobbed off any kind of returns many managers had managed to squeeze out so far this year — through the end of November, hedge funds had lost 2% on average, according to Hedge Fund Research.

Going into 2019, industry observers and participants believe these trends will dominate the conversation:

Equity funds will be put to the test

It's time for long-short funds to prove their worth. After nearly a decade of a tranquil, post-crisis bull market, when equity hedge funds on average finished in the black but rarely beat the S&P, market volatility in 2018 has given investors reason to turn to active management again. Now these equity hedge funds have to prove to clients they're able to crank out positive returns with the markets in constant spasms.

"More and more people believe the large-cap developed index is highly efficient, and it's very hard to deliver any excess returns," said Don Steinbrugge, CEO of the hedge-fund consultancy Agecroft Partners. "You consistently have to be doing more."

Long-short strategies still hold the highest proportion of assets of any hedge-fund strategy in the industry, according to Troy Gayeski, a senior portfolio manager at the fund-of-funds manager SkyBridge Capital, with 40% to 50% of industry assets under management. The hedge-fund industry's asset total — more than $3.2 trillion — was partially inflated by this equity exposure during the market's long bull run.

If long-short players can't keep the returns up during bouts of volatility, then industrywide assets will start to slip because of poor performance and investor outflows.

With a lower benchmark to beat, equity hedge funds would be under the microscope in 2019.

'2 and 20' will continue to fade away

The 2% management fee and 20% performance fee structure typical of the hedge-fund industry's early days has been slipping away for years. Hedge Fund Research reported that only 30% of the industry had fees at or greater than the traditional "2 and 20" rate. The average management fee has fallen to 1.43% industrywide, and incentive fees sat at 16.93% as of the end of the third quarter, according to the data provider.

Part of the squeeze on management fees comes from public pension funds pressured by legislatures to lower the fees on their portfolios.

The Teacher Retirement System of Texas — the biggest US pension fund in terms of hedge-fund assets, according to data from Preqin, with $14.7 billion of its $151 billion portfolio allocated to hedge funds — has since 2016 pushed hedge funds to accept a 1% management fee and 30% performance fee structure, according to Brad Gilbert, the pension's senior director of hedge funds.

"The traditional hedge-fund fee structure is flawed," Gilbert said at an April meeting of the pension's board.

Managers will battle more than just one another for top talent

Much as in investment banking's battle for top tech talent with the Googles and Facebooks of the world, hedge funds looking to up their technology game are finding that they are competing against more than just the manager down the street.

Hedge funds are looking to hire in positions from systems and data engineers to machine-learning specialists, but they are losing out to Silicon Valley for top talent, said Peter Wagner, CEO of the recruiting firm Affinity North.

Of the compensation structure in the hedge-fund world, he said that with the "bonus-weighted culture, a few bad years leaves people very disillusioned."

Jobs at big tech firms like Google that are developing new products and are at the front lines of tech innovation may be more fulfilling for tech workers than a job at a typical hedge fund, Wagner said. Old-school trading systems at older hedge funds have forced some industry tech roles to focus on maintaining legacy products instead of building new ones.

And that's not to mention the compensation upside.

"It's very easy for a Facebook to add stock shares to an offer, and it's very cheap for them to do it," Wagner said. "There's no real equivalent on the hedge-fund side."

More fund-to-family-office transitions

Some older hedge-fund founders have struggled to keep up with the market over the past couple of years, or have just decided it wasn't worth the effort to keep pushing off young startups, cranky investors, and aggressive regulators.

So the allure to "close it down" is understandable, said Adam Zoia, CEO of CompIQ, a consulting and database company in New York.

"They're saying, 'You know what? I don't have the energy to wait around for another moment where I might outperform,'" Zoia said.

The billionaire Leon Cooperman said exactly that in July when he announced he would turn his $3.6 billion hedge fund, Omega Advisors, into a family office by the end of the year and return outside capital to investors.

"I don't want to spend the rest of my life chasing the S&P 500 and focused on generating returns on investor capital," Cooperman told investors in a letter. Cooperman, who turned 75 this year, founded the firm in 1991.

The multibillion-dollar funds Highfields Capital Management — founded by Jonathon Jacobson, a former Harvard endowment stock-picker — and Ascend Capital also announced transition plans to investors in the fourth quarter.

"After three-and-a-half decades of sitting in front of a screen, I realized I am ready for a change," Jacobson said in an October letter to investors, alerting them that he would be returning outside capital.

"It's not a great time to be in the hedge-fund business, relative to other times," Zoia said, adding that this kind of stagnation is common for a "maturing industry."

Put another way, the "insulation" protecting the industry from external forces has gone away, said Gary Stibel of the New England Consulting Group.

"There's going to be unhappy people on both the investor and the manager side" next year, Stibel said.

The hunt for differentiated data will be even more cutthroat

It doesn't matter what your hedge-fund strategy is — the need for differentiated data is universal. And there has been a boom in alternative-data providers because of it.

According to AlternativeData.org, there are roughly 375 companies offering some new form of data. The ones known best in the industry have now become table stakes — without their information, a manager is automatically starting at a disadvantage.

But more niche players have cropped up, using natural-language-processing software to scan what traders are saying on Twitter, as well as integrating CIA interrogation techniques into a model to determine when company executives are being deceptive on earnings calls.

"People's needs keep changing, and the data sets keep changing," said James Crane-Baker, the CEO of PsychSignal, which scans and scrapes the social-media posts of traders and sells the data to quant hedge funds. The most successful funds in the future, Crane-Baker said, will be the ones that employ the data buyers who "travel the world looking for new data sets."

Well-known Wall Street firms seem to be paying attention to this boom in both data collection and data budgets. Third Point Management last year recruited Matt Ober, WorldQuant's cohead of data strategy, to be its chief data scientist, while Nasdaq has purchased two of the hedge-fund industry's biggest data providers, eVestment and Quandl.

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• Hedge-fund managers struggled through 2018 as market volatility and fee pressure cut into returns and profits.
• The funds to watch in 2019 are a mix of well-known veterans, up-and-coming startups, and star traders ready to set out on their own.

Through the first half of 2018, hedge funds were getting along pretty well. The year did not finish on the same note.

The third quarter was the first three-month stretch in which fund closures outpaced launches in more than a year, and market volatility in October and November wiped out many managers' marginal gains for the year.

We talked to top hedge-fund consultants, recruiters, lawyers, and investors for their picks about the managers they'll be watching next year.

They include well-known names like Point72 Asset Management's Steven Cohen and AQR Capital Management's Cliff Asness in addition to lesser-known managers who are distinguishing themselves with unique strategies.

Here they are.

Point72 Asset Management

Cohen was back to managing outside investor money this year after a two-year ban he received in a government crackdown on insider trading that focused on his old hedge-fund firm, SAC Capital.

Cohen, known for winning just about any trade he makes, was not immune to the performance struggles that afflicted others in his industry, reportedly finishing flat for the year through November. His firm currently manages about $13 billion, including Cohen's personal fortune.

His multistrategy firm, with subunits running different styles of funds, will still be a big-time draw for both investors and analysts, said Jason Schulman, a partner at recruiting firm Long Ridge Partners. Investors at single-manager firms are starting to sour on the reliance of a single strategy or manager to produce returns, Schulman said, pushing them from funds mimicking Julian Robertson's Tiger Management to platforms like Cohen's.

"Money and investment professionals will flow to larger and more stable platforms," Schulman said. His firm is starting to get people to return their calls that had ignored them "for six, 12, even 18 months."

Point72 is ready to grow. The manager's new New York office in Hudson Yards is set to open in early 2019 and is 20% bigger than the combined space at its two Manhattan offices, both on Madison Avenue.

Voleon Capital Management

The biggest fund founded with machine-learning techniques as the firm's core strategy is, asset-wise, nowhere close to threatening the biggest old-school stock pickers.

But this new type of fund — which is attracting "gamers, hackers, and people who have never played in the space before," according to Protégé Partners Chief Investment Officer Michael Weinberg — is pushing quants and old-school traders alike to reevaluate how they are getting and using data.

The biggest fund in the space is $2 billion Voleon Capital Management, which was founded in 2007 by Michael Kharitonov, who has a Ph.D. in computer science, and Jon McAuliffe, who has a Ph.D. in statistics. Instead of "having humans look at individual events within the marketplace," the firm's algorithms look at "persistent effects across large swaths of data," the firm's website reads.

And performance has reportedly been solid, posting annualized returns of roughly 10% since the fund first started trading in 2008 through 2017, despite losing money the first two years.

Kirkoswald Capital Partners

Greg Coffey is beating the United Kingdom to the punch with his own Brexit, as the former star trader at GLG Partners is moving his trading desk for his hedge fund, Kirkoswald Capital Partners, to New York at the beginning of 2019.

The Australian fund manager retired in 2012 at the age of 41 to spend time with his family before launching Kirkoswald this year. The trader, who was once named the "Wizard of Oz" because of his trading success and Australian heritage, is reportedly concerned with London's role as a financial powerhouse post-Brexit. His concerns echo those of Brexit critics as well as other hedge-fund managers including Citadel's Ken Griffin, who in November said, "London's days as the epicenter of financial markets, for the time being, are now in its past."

Coffey has been confident in his abilities to raise outside capital and generate solid returns, reportedly telling investors in October that he managed about $500 million and expected it to double by the end of 2018. Another investor presentation said the firm has the capacity to manage $2 billion. Through the end of October, Coffey's flagship macro fund was reportedly up 6.2% the first six months of the year.

• The 2012 MacBook Pro I bought almost six years ago was the most powerful model I could buy, and it still runs perfectly well.
• However, the new and improved features and design on the newer MacBook Pros made me feel like I was missing out.
• It was difficult to justify buying a new laptop, which made me realize that buying the newest and most powerful model isn't always the best idea if you want to keep up with new features. 

Last year, I faced a conundrum. My 2012 MacBook Pro was still so good that I found it hard to justify buying a newer model.

I bought the most powerful 15-inch MacBook Pro back in 2012 because I knew its Core i7 processor would keep up for several more years than a MacBook Pro with a less-powerful Core i5 processor.

The concept is called "future-proofing." Basically, I buy a device that's way more powerful than necessary for my current needs in anticipation for the future, when operating systems and apps will require more horsepower.

My plan worked. My nearly-six-year-old laptop is still running smoothly for its age, especially after I replaced its slow, old hard drive with a more modern and fast SSD drive. I also upgraded its RAM from 4 GB to 16 GB. In the most practical sense, I had no need to spend a couple thousand dollars on a new laptop. In fact, I could probably squeeze another few years out of my trusty 2012 MacBook Pro.

But future-proofing meant I was missing out on the new and improved features found in newer models. I didn't really want my five-year-old MacBook Pro anymore, even though it still runs so well. 

In the end, I upgraded, but I didn't go for the newest, most powerful model.

Here's why I chose the MacBook model I did, and why I upgraded even though my 2012 MacBook Pro still runs perfectly well:

SEE ALSO: The best Apple MacBook laptops for every budget

I upgraded to a refurbished MacBook Pro that was a year-old at the time I bought it.

I went with a refurbished 2016 15-inch MacBook Pro with a Core i7 and 16 GB of RAM, considered "last year's" model among Apple's newer 2017 lineup at the time I bought it.

The powerful Core i7 processor in the 2016 15-inch MacBook Pro will last me several years, just as the i7 did on my 2012 MacBook Pro. That means I'll probably face a similar conundrum down the line when Apple introduces great new features that make my 2016 model feel old. But at least I didn't pay for a brand-new 2017 model — I saved myself $450 by going with a refurbished laptop.

Plus, one of my requirements for a laptop is a 15-inch display, and Apple doesn't offer its 15-inch MacBook Pro with anything less than a Core i7 processor. So I didn't have much of a choice unless I was willing to compromise on screen size, which I clearly wasn't.

You can read my review of the refurbished 2016 15-inch MacBook Pro here.

One of the biggest reasons I upgraded was because my 2012 MacBook Pro was a hulking beast.

The mid-2012 15-inch Apple MacBook Pro looks and feels like a brick compared to pretty much every model that came after it. It's almost an inch thick and weighs a little less than 6 pounds. Back in the day, that was fine for traveling, as it was pretty normal for a 15-inch laptop to be so big and heavy. Today, however, it's no fun packing and carrying around such a heavy machine.

Compare it with today's sleek, slender, and lightweight MacBook Pro.

The 2016 model of Apple's 15-inch MacBook Pro is just under 0.60 inches thick, and it's about three entire pounds lighter than my old 2012 MacBook Pro. It's still no featherweight, but it's a lot more portable.

• Eddie Murphy's family gathered together for Christmas. 
• The comedian posed with all 10 of his children for the reported first time in a photo — including his nearly one-month-old baby Max.
• His fiancée Paige Butcher is also pictured.
• His eldest daughter Bria Murphy shared the image on her Instagram. 

Eddie Murphy had a full house for Christmas. 

The comedian's eldest daughter Bria Murphy, 29, shared a rare photo on Instagram of Eddie surrounded by all 10 of children. The photo is reportedly the first time Eddie has posed with all of his kids, including his new baby, Max. Eddie and fiancée Paige Butcher welcomed Max on November 30. 

Butcher is holding Max in the photo, while Murphy holds their 2-year-old daughter, Izzy. 

In the photo are Eddie's five kids with ex-wife Nicole Mitchell: Bria; Miles, 26; Shayne, 24; Zola, 19; and Bella, 16. Also included are 28-year-old Eric (his son with Paulette McNeely), 28-year-old Christian (his son with Tamara Hood), and 11-year-old Angel Iris (his daughter with Spice Girl Mel B). 

Also pictured are Eddie's mother, Lillian, and Butcher's mother.

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NOW WATCH: The legendary economist who predicted the housing crisis says the US will win the trade war

• Victoria's Secret is increasingly falling out of favor. The brand came under fire in November after an executive from its parent company, L Brands, made controversial comments about transgender and plus-size models during an interview with Vogue.
• Same-store sales were down 6% at stores only in the most recent quarter. They were down 2% when including online sales.
• As attitudes change, a new breed of women's underwear companies has swooped in to offer alternatives. 
• We've compiled a list of up-and-coming underwear brands that could pose a threat to Victoria's Secret.

Once the kingpin of the US lingerie market, Victoria's Secret is increasingly finding itself falling out of favor as attitudes around women's underwear shift.

Critics have said that the retailer's push-up bras and racy runway shows no longer resonate with the modern customer in the era of #MeToo. The brand came under fire in November after an executive from its parent company, L Brands, made controversial comments about transgender and plus-size models during an interview with Vogue.

Read more:Overtly sexualized ads, controversial comments from executives, and sliding sales: Here's why Victoria's Secret had a huge fall from grace in 2018

These pressures have shown up in its numbers. Same-store sales were down 6% at Victoria's Secret stores in the most recent quarter. They were down 2% when including online sales.

This year's Victoria's Secret Fashion Show also didn't get the fanfare it hoped for when it comes to viewership.

According to data sent to Business Insider from ABC, the network that broadcast the show, 3.3 million people tuned in to watch the fashion show on December 2. This was a substantial drop from 5 million viewers in 2017 and 6.7 million in 2016, when it previously aired on CBS.

As attitudes change, a new breed of women's underwear companies has swooped in to offer alternatives. Many of them have been open about the need for change in the industry, and in some cases, they have even been critical of Victoria's Secret. 

Read more: 'Your show may be a "fantasy" but we live in reality': Lingerie startup ThirdLove slams Victoria's Secret exec in full-page New York Times ad

We put together a list of the top up-and-coming underwear brands and labels that threaten to upend Victoria's Secret:

SEE ALSO: These 10 fashion and beauty brands are poised to have a huge 2019

American Eagle's Aerie

American Eagle's underwear brand, Aerie, has become one of the company's biggest sweet spots. The underwear collection, which includes a limited selection of apparel and swimwear, is targeted at 15- to 25-year-olds and covers a breadth of sizes from XXS to XXL and cup sizes AA to DDD. 

The brand has become best known for its unretouched photos and body-positive campaign, known as #AerieReal. This seems to be resonating well with customers as it has seen 16th consecutive quarters of positive same-store sales growth.

ThirdLove

Online bra retailer ThirdLove has made it possible to buy bras without having to go near a fitting room.

Shoppers are asked to complete a quiz to determine their perfect bra shape. ThirdLove then ships three bra styles out to the customer, who is then able to trial these styles for up to 30 days. 

Cofounder and co-CEO Heidi Zak told Business Insider in September that more than 11 million women have taken the quiz, and that ThirdLove now has more than 600 million data points from this. The algorithm is getting smarter and smarter, she said. 

The company came into the spotlight last month after it posted a full-page ad in The New York Times, slamming an executive from Victoria's Secret for his controversial comments about transgender and plus-size models. 

Lively

New York-based online underwear startup Lively was founded by Michelle Cordeiro Grant, a former senior merchant for bras at Victoria's Secret. The brand prides itself on being a bridge between athletic wear and lingerie, which it has coined "leisurée."

Bras cost $35 and come in a mix of styles including bralettes, t-shirt bras, push-up bras, and plunge bras.

• Condé Nast Traveller recently released its 2019 Gold List ranking of the best hotels in the world.
• The editors selected the 78 best hotels around the world, which included the top 13 hotels in the US.
• Only three American cities had more than one hotel on the list: New York City, LA, and Chicago. 

From waterfront resorts in Miami and Hawaii to an oasis in the middle of the Utah desert, the best 13 hotels in America represent a wide range of luxury experiences.

Condé Nast Traveller recently released its 2019 Gold List, in which the editors select the top hotels around the world. The list features 78 hotels, 13 of which are in the US.

The hotels cover a wide range of prices, starting in the mid-$100s for a night at The Robey in Chicago and all the way past $1,000 for a night at Amangiri in Utah.

Read more: 31 incredible hotels everyone should stay at in their lifetime, ranked by price

Notably, several of these top-ranked hotels are repeatedly mentioned on lists of top hotels across the world; The Peninsula in Chicago and Four Seasons in Hualalai, for example, both also appeared on the US News & World Report's 2018 hotel ranking, as Business Insider previously reported.

If you're more interested in personalized experiences at smaller hotels, consider taking a look at the top 14 boutique hotels in the world, from a romantic retreat in South Africa to a private villa in Thailand.

Keep reading for a look at the best hotels in America. We also took a look at prices for rooms booked out one month in advance, and noted the starting rates.

SEE ALSO: A 7-bedroom Swiss cabin has been named the world's best ski chalet for 2 years in a row — and an inside tour quickly proves why

READ MORE: The 50 best restaurants in the world in 2018

The Beekman, A Thompson Hotel, New York

Rates starting at: $299/night

The St. Regis New York

Rates starting at: $779/night

The Carlyle, New York

Rates starting at: $1,000/night

• Here are four executives' predictions for changes in the asset-management industry in 2019, from the culling of so-so products to new types of private-equity deals.
• They said the new year would change how impact investors can profit from their early-stage investments, as major private-equity names come knocking at the door with more capital than ever.

JPMorgan Asset Management: culling of mediocre products

In the last year and a half, Chris Willcox, the president of JPMorgan Asset Management, oversaw a 25% reduction in the firm's actively managed funds to weed out underperformers. While his firm has largely finished its product-cutting spree, he said, other firms will probably look to do the same. Willcox said the best way to avoid that action is to not launch poorly conceived funds in the first place.

"The core responsibility of asset managers is to do as good a job as they can for their clients," he said. "That means selling things or not continuing to persist in things when they don't have a deep belief in their ability to generate alpha. The hurdle should be very high to launch a new product because you should think that you're going to live with that product forever, or until your conviction expires."

Increased volatility in 2019 will force others to make the type of product decisions that JPMorgan tried to implement while markets were still up, Willcox said. To be sure, the firm saw a hit of hundreds of millions of dollars stemming from its reorganization, between revenue sacrifices and fee reductions, but Willcox said those losses are easier to absorb when the market environment is largely positive.

"The way you'll really see people taking action will be if we're to see a more significant and longer-lasting setback to asset prices," Willcox said. "At that point, that has such a direct impact on the economics of asset managers, that's when they get their arms twisted to take a bit more action. You can see the start of it with the bit of volatility this year. I've seen a number of announcements from people on the actions they're intending to take, including headcount."

Schroder Adveq: new secondaries strategy

One niche strategy within the illiquid-alternatives space is expanding and offering more opportunities to investors who don't want to hold on to long-term investments, according to Ethan Vogelhut, the head of buyout investments in the Americas for New York-based private-equity firm Schroder Adveq.

Secondaries — the buying and selling of existing investor stakes, typically in funds — has become a popular strategy since the global financial crisis, as alternatives firms seek ways to extend their investments with more money. Secondaries fundraising hit a record last year at $46.5 billion, according to research provider Preqin.

Buying and selling coinvestments across asset classes is "the next new thing" in secondaries, Vogelhut said. Like secondaries, coinvestments — where fund investors make additional investments in individual companies alongside the fund — are picking up steam, with a record $11.1 billion raised last year, per Preqin.

As the deals get older, some investors want liquidity, or they may not be able to fund follow-on capital for further investments, Vogelhut said. In one deal, for example, a private-equity partner's investor needed capital for an unrelated investment. To raise money, that investor wanted to sell both a fund stake and some coinvestments. Schroder Adveq bought out the fund interest and the coinvestment positions.

More of these types of deals will be sourced by the fund's existing investors, secondary firms, and even the fund managers, Vogelhut said.

Flat World Partners: better exits for early-stage impact investors

Impact investors — firms aiming to make money while doing good — will see better opportunities to sell their investments in 2019 than in the past, said Anna-Marie Wascher, CEO of New York-based impact investing firm Flat World Partners.

As major private-equity firms raise billions for impact-investing funds, they'll provide better exit opportunities for earlier-stage investors like Flat World Partners, which invests in companies with $5 million to $15 million in revenue, like biodegradable packaging.

TPG is raising up to $3.5 billion for its second impact-investing fund, while KKR is raising at least $1 billion for its inaugural fund, sources said.

"That means they have minimum tickets they can write and certain valuations they're trying to target, which inevitably gives a lot of lift to companies in earlier-stage investing, with emerging markets being a huge piece of that," Wascher said.

While family offices and angel investors typically fund Series A and B funding rounds for impact-focused startups in emerging markets, Wascher said there has been a gap in later rounds of funding — those that come before a company is large enough to go public or sell to another company.

Read more:UBS Chairman: The niche market for 'impact investing' could be huge — but it needs derivatives

Non-private-equity players are also increasingly more interested in impact investments. As consumer-focused conglomerates such as Mars, Kraft Heinz, and Unilever expand globally, they're acquiring local companies — another expanding exit opportunity for firms like Flat World Partners.

UBS Asset Management: active managers build their case in volatility

UBS Asset Management oversees both passive and active products, which the firm's head, Suni Harford, said makes her an unbiased voice in the ongoing debate about the strategies.

While investors have long been fleeing active funds in favor of passive products, she said the calculation is changing.

As market volatility pushes the performance of index-tied, passive products down, Harford said, the active managers who can outperform matter more than ever.

She cited a passive portfolio that returned 5% this year and compared it to an active manager that returned 6%.

"That extra 100 basis points from active — that's a big difference," she said, contrasting an active manager's outperformance when indices are up significantly. "An extra 100 basis points on 23%? Not so much."

With more market volatility in the forecast for 2019, the active manager's performance difference could be even more pronounced next year.

"I do think we're going to have a balancing there, and you're going to see that as an opportunity," Harford said.

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• Market volatility at the end of this year put a pause on the initial-public-offering pipeline, but tech investment bankers expect the deals to flow at the turn of the calendar year.
• With a long list of marquee names including Uber and Lyft, IPOs in 2019 could set record highs in terms of valuations and exits for Silicon Valley venture capitalists.
• But VCs aren't the only ones set to win. Bankers expect to see private-equity firms try their hands at tapping the public markets as well.
• Meanwhile, the largest tech companies in China are also taking a hard look at US exchanges for IPOs of their own.

Tech initial public offerings could break records in 2019 as US bankers prepare for some of the largest private companies in the world to make their big stock market debuts.

Despite a blockbuster lineup of Silicon Valley success stories, including Uber (reportedly weighing a $120 billion valuation) and Airbnb (most recently valued at $31 billion), there's one big question on everyone's mind: How will stock market volatility affect IPOs?

The stock market sell-off in October was the worst Wall Street had seen in seven years, and some IPO-ready companies even put on the brakes to avoid going public in a down market, bankers said.

But technology bankers are an optimistic bunch. While bankers have said they are keeping a watchful eye, most still expect there to be about 50 US tech IPOs in 2019. That would be just shy of 2018's total, which the data provider Dealogic pegged at 53 in mid-December with a total of $19.8 billion in deal value.

"I don't think we're seeing people change their plans in light of the volatility at the moment," said Greg Chamberlain, the managing director and head of US technology, media, and telecoms equity capital markets at JPMorgan. "As we get into 2019, people will think more about the precise timing to go public."

When these companies decide to go public is anyone's guess — an IPO-ready team must decide only about two weeks ahead of the public listing. Though for some banks, the second quarter may be a hectic one.

"There's no doubt we're going to have a very busy March, April, and May, and that's going to set the stage for the remainder of the year," said Chris Cormier, the managing director and head of tech equity capital markets at UBS.

But with many companies taking advantage of the opportunity to file confidentially, it's hard to know exactly which companies are near the finish line.

"At this point, anyone who can file confidentially will file confidentially," said Anna T. Pinedo, a partner Mayer Brown's corporate and securities practice. "Assuming that the market cooperates, there will probably be a big surge in the number of public filings in early January."

It's the year of the unicorns

Some of the most valuable private companies in Silicon Valley have plans to go public in 2019. Both Lyft and Uber filed confidentially in the first week of December, and Slack reportedly tapped Goldman Sachs to run its own IPO. The unicorns Airbnb and Pinterest are all also rumored to be in the pipeline.

"We had a long period of companies staying private longer, and the birth of a generation of unicorns, and that has accelerated this year when people thought it might be leveling off," said Nick Giovanni, the cohead of global technology investment banking at Goldman Sachs. "What it means is we're set for a tech IPO super-cycle, where there are more companies going public and more large IPOs happening than ever before."

Even Bumble, the dating app where women have to make the first move, is weighing its options. And others, such as the venture-backed vegetarian food company Beyond Meat, has publicly filed — though there's debate about whether a meat-alternative company should be lumped in with software startups.

"Many of these companies could have executed an IPO a year or two earlier. When they do come to list they will be well capitalized," said JPMorgan's Chamberlain.

But insiders also expect a healthy pipeline of smaller software startups with deal sizes of about $200 million — companies that didn't quite make it public in the big enterprise tech spree of 2018, when bigger names such as Dropbox and DocuSign entered the public markets.

The cybersecurity company CrowdStrike, a competitor to BlackBerry's $1.4 billion acquiree Cylance, reportedly hired Goldman Sachs for its IPO, while others including the $1.25 billion experience management company Medallia have made early moves, such as hiring a new chief financial officer.

"There is still a lot of backlog in software," said Neil Kell, the chairman and head of US technology, media, and telecommunications equity capital markets at Bank of America.

"If you take size out of the equation and just look at the number of transactions, software businesses are going to grab the majority of the deal flow," he said.

Private equity is ready to experiment with IPO

While venture-capital firms are set to see huge returns on decade-old investments, private-equity firms also have their eye on Wall Street as an exit vehicle.

Over the next year or two, bankers expect IPOs from technology-focused firms such as Vista Equity Partners and Thoma Bravo — investors that have traditionally preferred to exit through mergers and acquisitions.

"There's probably 10 to 20 private-equity-backed software companies that have to come out over the next 24 months," UBS' Cormier said.

Private-equity IPOs for tech companies are not unprecedented, though investors have only recently shifted their attention toward growing companies rather than cutting costs.

SolarWinds, which was bought by Silver Lake Management, HarbourVest Partners, and Thoma Bravo in 2010, went public in October. And in a sign of what's to come, Vista reportedly hired Goldman Sachs to lead an IPO for its secure-access software Ping Identity, which it acquired for a reported $600 million in 2016.

'Majority' of Chinese companies looking at US markets

Another trend insiders expect to see in 2019 is a continued flood of highly valued Chinese companies hitting the US public markets.

From the e-commerce app Pinduoduo to the peer-to-peer lender X Financial, Chinese companies have outpaced US companies in US-exchange IPOs in 2018. Tencent Music, China's largest music-streaming company, made its stock market debut on Wednesday at a $21 billion valuation, and if it performs well, its success could propel other companies to action.

China is home to a handful of unicorn tech companies including the $75 billion Bytedance, the $56 billion Didi Chuxing, and the $18.5 billion Lu.com, according to CB Insights. While some will choose to list in Hong Kong, New York is on everyone's radar, bankers said.

Companies listed on exchanges in China and Hong Kong face stricter regulations than they do in the US, which many founders are drawn to for benefits such as different voting rights for different share classes and better investor liquidity.

"If you talk to any of the big Chinese growth companies, the majority want to list in the US," Cormier said.

While international politics have taken their toll on cross-border M&A, the impact on IPOs has been less severe, and Chinese companies have been wooed to the US markets by access to capital and the allure of getting publicity on a global stage, bankers said.

"There's all of the political implications of trade negotiations and trade conversations and how that ebbs and flow," Kell said. "But the US is arguably one of the largest, if not the largest top source of public and private capital for companies globally."

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• Amazon announced a "record-breaking" holiday season with more items ordered than ever before.
• Top sellers in the tech category included Amazon devices like the new Echo Dot, as well as Bose QuietComfort 35.
• Smart home items like smart plugs and voice assistant devices dominated the rest of the list.

Gift-giving used to be more portable, with gadgets like iPods and CD players dominating top selling items.

Fast forward to 2018, and it's all about the home — the smart home, that is. For Amazon's top-selling tech items, the list is dominated by smart plugs, voice assistant speakers, and robot vacuum cleaners.

The overall best-selling item was the new Echo Dot, refreshed this fall and now in its third generation. It was both the top-seller overall as well as the best-selling piece of tech on Amazon for the holiday season.

Read more: Amazon reveals the top-selling items of the season as it announces record-breaking holiday sales

The device was discounted heavily starting in late November. Starting at $50, it was down to $29.99 for most of the holiday season, hitting a low of $24 on Thanksgiving, Black Friday, and Cyber Monday.

Amazon also says the Bose QuietComfort 35 (series II) Wireless Headphones were a best-selling item. Retailing for $349, they dipped to $299 multiple times throughout November and December, according to Camelcamelcamel.com, a site that tracks prices of goods on Amazon.

Here's Amazon's best-selling tech of the holiday season:

• The new Echo Dot (third generation)
• Bose QuietComfort 35 (series II) Wireless Headphones
• Fire TV Stick 4K with Alexa remote
• Echo
• Amazon Smart Plug
• Ring Video Doorbell 2
• TP-Link Kasa Smart Plug Mini Outlet
• iRobot Roomba 690
• Samsung 65" 4K UHD 8 Series Smart LED TV
• Apple iPad, wi-fi and 32 GB edition in Space Gray
• Wemo Mini Smart Plug
• Blue Yeti USB Microphone in Blackout
• Wyze Cam 1080p HD Indoor Wireless Smart Home Camera
• HP Sprocket Photo Paper

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• Ed Schmults, a former executive who spent years at Patagonia and orchestrated a number of turnarounds — including storied toy retailer FAO Schwarz — was recruited by a headhunter to become the CEO of cannabis firm Calyx Peak Capital.
• Schmults is now building out his team. He said in an interview with Business Insider that he's looking for candidates from smaller companies who can move fast with little support because the industry is "evolving almost daily."
• "I'm looking for people with the quintessential entrepreneurial experience," Schmults said.

When veteran retail executive Ed Schmults received an out-of-the-blue phone call from a headhunter in July, he had no idea that in just a few short months he'd end up as the CEO of a cannabis company.

As the new CEO of Massachusetts-based Calyx Peak Capital — a firm that invests in cannabis retail licenses in a number of states — he's now looking to build out his team.

And he's not looking for big-name executives.

"Some of our competitors are out there trumpeting their executives from multibillion-dollar companies, and I'm sure those men and women are awesome," Schmults told Business Insider in an interview. "But I think what you really want at the start of an industry are people who've been involved in smaller companies who can work fast, be nimble, and wear multiple hats."

Schmults said the cannabis industry is "evolving almost daily." That's why he's focusing his recruiting on people who have deep experience in smaller businesses "where everyone's going all out," rather than mega-corporations.

"You know, I'm looking for people with the quintessential entrepreneurial experience," Schmults said. "I need people who can create the reports themselves and make decisions on the fly."

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To Schmults, that sweet spot between startup and multibillion-dollar firm is what he knows best.

After a stint at Goldman Sachs, Schmults spent seven years at Patagonia in California and Tokyo in the 1990s — while the outdoor-oriented clothing brand was rapidly growing — before he was recruited to turn around another clothing company, Moonstone Mountain Equipment.

He parlayed that experience into executing a turnaround of FAO Schwarz, the storied New York City toy retailer.

Schmults said the headhunter calling him about the CEO position at Calyx was "one of those cock-your-head-to-the-side" moments.

"I was like, 'Huh, cannabis? I'll have to think about that,'" Schmults said. But the more he dug in, the more he realized that the potential health benefits of the plant were "astonishing."

"At the end of the day, I really liked the investors," Schmults said.

And the chance to take what he learned across his career to build a team from the ground up was a "rare opportunity" that doesn't come along so often, Schmults said.

"I just think it's a fascinating intellectual opportunity and a chance to remove the stigma," Schmults said.

See also:

• The top 12 venture-capital firms making deals in the booming cannabis industry that's set to skyrocket to $75 billion
• The CEO of the biggest cannabis company in the US reveals what's next following a $682 million acquisition
• Hedge fund legend Leon Cooperman is investing in the marijuana industry — and it's another sign the sector is heating up

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• Wrestling referee Alan Maloney has been banned from officiating in New Jersey's Buena Regional School District, its superintendent announced on Wednesday. 
• It comes after Maloney forced wrestler Andrew Johnson to choose between forfeiting the match or cutting off his dreadlocks. 
• Johnson's family called the December 19 incident a "race-related transgression."
• Maloney had said Johnson's dreadlocks were against the rules.

The New Jersey high school wrestling referee who forced a black teen to decide between forfeiting a match or cutting off his dreadlocks has been banned from officiating in the district following a Board of Education meeting on Wednesday.

Buena Regional School District Superintendent David Cappuccio and the Board of Education met on Wednesday night to discuss the December 19 incident involving referee Alan Maloney and Buena Regional High School varsity wrestler Andrew Johnson.

Cappuccino announced at the meeting that Maloney is "done working with our district,"according to WPVI.

In video of the incident, Johnson looked visibly upset as an athletic trainer cuts off his dreadlocks. Johnson had to use injury time for the haircut and almost ran out of time wrestling his competitor during the match.

The video of Johnson’s hair being cut sparked outrage online, with many accusing the referee of racism.

Maloney, who previously was accused of calling another officiator the N-word in 2016 at a private function, said Johnson's dreadlocks were against the rules.

Dominic A. Speziali, an attorney for the Johnson family, said in a statement Monday that Maloney told Johnson just before the start of his match that his hair "wasn't in its natural state" and referred to the dreadlocks as "braids."

According to New Jersey high school wrestling rules, legal hair covers should be presented at weigh-ins and when competitors are checked for grooming.

The National Federation of State High School Associations says wrestlers have to wear a legal hair cover if his or her hair extends past the earlobes, the Courier Post reported.

Johnson’s family blamed Maloney for the incident, calling it a "race-related transgression."

Read more:A high school wrestler was forced to cut off his dreadlocks before a match, and people say it's discrimination

They said Maloney missed the weigh-in, where wrestlers' appearances are inspected so officials can inform competitors of any rule violations before matches begin.

"As this matter is further investigated, the family wants to be clear that they are supportive of Andrew's coaches and the team’s athletic trainer," Speziali said in the statement. "The blame here rests primarily with the referee and those that permitted him to continue in that role despite clear evidence of what should be a disqualifying race-related transgression."

The family said Johnson, a junior at Bueno Regional High, was previously able to wrestle with the dreadlocks without issue.

Maloney is now facing a civil rights investigation, Leland Moore, a spokesperson in the New Jersey Attorney General’s Office, told Buzzfeed News.

The American Civil Liberties Union in New Jersey said in a statement that the incident was "not about hair," but "about race."

"How many different ways will people try to exclude black people from public life without having to declare their bigotry?" the ACLU chapter tweeted on Friday.

• Read more:
• French super club Paris Saint-Germain admits young footballers were racially profiled to limit the number of black players
• A high school assistant principal is accused of harassing a transgender student over his choice of bathrooms
• Students say they warned school administrators about the California teacher who was arrested for forcibly cutting a student's hair, and their calls went ignored
• A high school has banned students from wearing expensive designer coats in an effort to stop 'poverty shaming'

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