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MORGAN STANLEY: Here's how Amazon can offset $3 billion of wage increases (AMZN)

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Amazon

  • Amazon's wage hike will take effect in two weeks, and Morgan Stanley says its cost is "manageable." 
  • The compensation increase will lift the company's operating expenses by $2.75 billion, according to Morgan Stanley analyst Brian Nowak.
  • Meanwhile, Amazon's previous investment in warehouse's Kiva robots will increase its fulfillment efficiency and offset the wage increase, he added.
  • Watch Amazon trade in real time here.

Amazon announced earlier this month that it is raising minimum wage for US and UK employees starting in November, and Morgan Stanley analysts say the cost is "manageable" as fulfillment efficiency improves from the company's Kiva robots. 

"We think improved fulfillment efficiency is set to offset the aforementioned wage increase," a group of Morgan Stanley analysts led by Brian Nowak wrote in a note sent out to clients on Monday. 

By the bank's calculation, the compensation increase will lift the company's operating expenses by $2.75 billion, or around 2.5% in fiscal year of 2019. The wage hike is "not small" but "manageable from a profit perspective," Nowak said.

Since 2016, Amazon has been aggressively investing Kiva robotics integration in its warehouse. These investments have been lifting Amazon's fulfillment costs per unit in the past two years, but will start to show benefits since the second quarter of this year, according to Nowak.

Amazon

"We believe these new warehouses are handling the same capacity with around 30% fewer square feet," Nowak said. "As we refine our fulfillment cost per fulfilled unit analyses we lower pre-wage- increase fulfillment costs by 6% or $2.6 billion in 2019."

Amazon

Considering lower fulfillment costs boosted by the efficiency, the unit cost of fulfillment will be flat with the wage increases, Nowak added.

And while the pay hike is manageable for Amazon, Nomura Instinet analyst Simeon Siegel recently said it comes at a cost for employees because Amazon is eliminating restricted stock options and monthly incentive bonuses for hourly workers. And so, if calculating stock and incentive benefits, these employees will actually "lose out" after the new wage change, Siegel said.

Amazon is set to report its quarterly results on October 25. The e-commerce giant is expected to earn an adjusted $5.62 a share on revenue of $57.05 billion, according to Bloomberg data

Morgan Stanley reiterated its "overweight" rating and $2,500 price target. 

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My portfolio just lost $75,000 in 12 days — here's why I'm not worried at all

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Ramit Sethi 2018

  • A stock market crash, or a dip, can cause even smart investors to panic.
  • Ramit Sethi is the author of a best-selling book on personal finance, and when the stock market dipped, he lost $75,000.
  • He isn't worried, because he knows successful investors play the long game, and that opting out of the stock market is far riskier than opting in.

Last week the stock market took the world on a wild ride, and in response, the media went crazy with scary headlines like …

The goal of these headlines is to get people to click, and people will, but the average investor is left only with doubt and scary-looking losses. Just look at this Instagram message asking me for advice:

Screen Shot 2018 10 15 at 1.34.35 PM

As an author of a New York Times best-selling book on personal finance and someone with a portfolio of investments, I’d like to share this piece of counterintuitive advice:

Keep calm and carry on.

In other words, don’t change a thing!

Don’t get me wrong. I was greatly affected by the decline. You can see that my portfolio dropped by over $75,000 in just 12 days of this month:

Screen Shot 2018 10 15 at 1.34.26 PM

Ouch.

Most people who lose $75,000, $2,000, or $500 would freak out,  sell their stocks, and say things like “I would just hold cash to be safe” or “See, this is why I don’t invest in stocks!”

But here are three reasons why I kept my investment portfolio untouched — and why you should stay disciplined, whether your portfolio is worth $500, $50,000, or $500,000.

1. Keep investing and you’ll get investment returns no matter what

Some years the stock market is up, some years it’s down. Before last week, in fact, the S&P 500 had been in thegreen for 13 consecutive months (the last time this happened was 1959).

But the big picture here is that as long as you’ve diversified your investments, the stock market returns, on average, approximately 8% after inflation.

annual real total returns

Having a bigger picture of the market and its history helps you with your financial goals, and also helps you understand that emotional decisions, like selling in a panic and chasing after “exciting” stocks, actually HURT your returns down the road. That brings us to the next point.

2. It’s not ‘timing’ the market, it’s time IN the market

Some people talk about “timing” the market to miss the bad days, like last week, but we’re terrible at predicting market swings. This means you could miss both bad AND good days and dramatically impact your returns.

market timing

The above chart shows that if you have someone who STAYS in the market between 1998 and 2017 with an investment of $10,000, they would get a 7.2% return — that’s $40,135!

But if they missed the five best-performing days, they would instead grow to $26,625 — a return of just 5.2%, almost 30% lower. That difference could be worth hundreds of thousands of dollars to you.

This study by University of Michigan Professor H. Nejat Seyhu shows that overall your return in stock market is consistent and improves thelonger you stay in it.

3. It’s pointless to look at daily trends

You might want to check investments regularly, but once you automate your money you should be checking once every six to 12 months. In fact, I wouldn’t have known about my losses if I didn’t notice Twitter having a meltdown over it.

The way we think about investments is totally backward. When the price of toothpaste or gas drops, everyone is happy and buys more. But when the price of investments — likes stocks or houses — drops, everyone flips out and starts thinking of selling.

It should be the OPPOSITE.

Lower prices are good as long as you have a long-term goal. If you’re young, that means you can pick upmore sharesof the stocks at a lower price. For people who are older, they would benefit from adjusting their asset allocation to be more conservative so that declines affect them less dramatically.

I’d like to encourage you to go from “hot” to “cool” around your money. Instead of feeling “hot” emotions like anxiety or fear, get educated enough to feel “calm” and “confident.” I feel calm because I know my money is automatically being invested every month, that staying in the market gives me much better returns than panicking and selling, and I can focus on other parts of my life.

Long term investments shouldn’t affect your day to day. Whether you lose $500 or $5,000 — or gain $50,000 or $2 million over time — the important thing is to nail down good personal finance habits so that when your portfolio grows in the future you’d exactly know how to react and can stay strong with your investments for years to come.

Reality: Investing isn’t supposed to feel like an exciting Hollywood movie. Your investments should be boring, passive, and automatic.

Because that’s what real investors would do.

Ramit Sethi is the author of the New York Times bestseller, "I Will Teach You To Be Rich,” and writes for more than 1 million readers on his websites, iwillteachyoutoberich.com and GrowthLab.com. His work on personal finance and entrepreneurship have been featured in The New York Times, Wall Street Journal, and Business Insider.

SEE ALSO: After 13 years of running my company, I've changed my mind in 5 key ways

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'We can literally do anything': Inside Hulu's pitch to advertisers on how it can outperform rivals

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Kelly Campbell headshot

  • The over-the-top TV (OTT) space is getting increasingly crowded, but Hulu thinks it's well-equipped to take on its competitors.
  • In a recent interview with Business Insider, the streaming service's marketing chief Kelly Campbell outlined Hulu's pitch to advertisers.
  • She said that Hulu places a lot of importance on its ad-supported user base, as well as on the fact that advertisers can get far more creative on the platform than just 15 or 30-second long ads.


With AT&T becoming the most recent player to hop on the streaming service bandwagon by announcing plans to launch its own service next year, the over-the-top television (OTT) space is getting more crowded than ever.

But Hulu is not worried, and thinks it is well-poised to take on competitors like AT&T, Netflix, YouTube, and Disney, not just for consumers but also advertisers.

"We actually see brands getting more and more interested in advertising with Hulu," Kelly Campbell, Hulu's chief marketing officer, told Business Insider in a recent interview. "Our ad revenues have grown tremendously in line with our subscriber growth."

While Campbell declined to give specifics, Hulu announced that it had surpassed $1 billion in advertising revenue in early 2017. It is expected to continue on this upward trajectory, reaching $1.4 billion in ad revenue by 2020 according to eMarketer, a forecast of double-digit growth for the service.

That is not incidental, said Campbell, as Hulu is in "a unique spot," at the intersection of everything happening in entertainment and technology. And there are plenty of options for brands to choose from, she said.

In its pitch to advertisers, one of the things Hulu emphasizes is its ad-supported offering. While the company also offers an ad-free version, over 60% of its on-demand consumers end up choosing the ad-supported version. While that may partly be because it is $4 cheaper than its ad-free version that costs $11.99, Hulu views it as a sign that consumers are willing to engage with ads.

"You're reaching consumers who have chosen an ad-supported product, which I think is pretty unique when it comes to both television and digital advertising opportunities," she said.

Hulu is indeed in a good position, offering an avenue for brands looking to run ads against TV-like programming at a time when rivals such as Netflix and Amazon Prime Video have remain ad-free. It is also an appealing alternative for advertisers at a time when linear TV-viewing is in decline, and platforms like YouTube and Facebook come under fire for brand safety issues. 

But Hulu offers far more than just creative in the form of 15 or 30-second long ads, she pointed out, such as brand integrations with its shows.

"We can literally do anything," she said. "So for a brand, it's like a playground. They come in and we can start brainstorming on ways to reach Hulu consumers, both through our platform but also through our content."

One example that Campbell highlighted was a branded integration that ride-hailing company Lyft did with the show "Marvel's Runaways." During the shooting of the show's first season, Hulu's team realized that the actresses and actors on the show were coming to work in Lyft every day, which screamed for a collaboration. So Hulu ended up integrating Lyft into the actual content of the show as well as its premiere.

"It was a way for Lyft to really connect with their consumer in a unique and different way, that they can't do anywhere else," said Campbell. 

Another way that Hulu has attempted to differentiate itself recently is by announcing that it would run ads even on offline programming at the NewFronts this year — an industry first among video streaming platforms. While some were not entirely convinced, the idea is that being offline actually makes ads more effective, as it eliminates many of the distractions that come with an internet connection.

As Hulu's subscription base continues to swell, expect advertisers to follow. As of May, Hulu said that it had more than 20 million paying subscribers. Plus, a recent study from online-streaming guide Reelgood found that Hulu is the dominant streaming service when it comes to television. 

Watch the full interview here.

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Patriots ID fan who tossed beer on Chiefs player and say they have turned the matter over to police

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Tyreek Hill Beer

  • A New England Patriots fan sprayed beer on Kansas City Chiefs wide receiver Tyreek Hill after scoring a touchdown during the "Sunday Night Football" game.
  • The Patriots say they have identified the fan and have handed the situation over to local police.
  • The team has also sent a "letter of disinvite" to the fan for all future events at the stadium.
  • The fan may face further consequences, as Hill and agent Drew Rosenhaus are reportedly open to the potential of prosecuting the case.


On Sunday night the Kansas City Chiefs played the New England Patriots in Foxboro in a battle for AFC supremacy.

It was one of the most thrilling games of the 2018 NFL season so far — a back-and-forth affair with plenty of scoring that eventually saw the home team leave with a 43-40 win thanks to a game-winning field goal in the final seconds.

But while the game was a great display from two of the best teams in football, its closing minutes were somewhat marred when an unruly fan decided to insert himself into the action.

Down a touchdown with just minutes remaining, Chiefs quarterback Patrick Mahomes found receiver Tyreek Hill for an unbelievable game-tying 75-yard score.

Hill let his momentum carry him as he ran through the back of the end zone, where one Patriots fan sprayed beer in his face, while others in the area raised middle fingers towards Hill.


While the interaction was ignored by the broadcast, on Monday, the Patriots announced that the team had identified the individual responsible for spraying the beer and had turned the matter over to local police. The Patriots added that the fan would be sent a "letter of disinvite" to all future events at Gillette Stadium. 

For his part, Hill handled the situation well after the game, telling reporters, "My coach told me, 'don't get emotional, don't get mad about it.' It comes with the territory, you know? I'm not mad at all."

Hill might not be mad, but he is reportedly looking to stand up for himself. According to ESPN's Adam Schefter, Hill and agent Drew Rosenhaus are looking to take action against the fan.

While the Patriots got the win in the end, Hill still had one of the best games of his career, finishing with three touchdowns and 142 receiving yards.

SEE ALSO: Dolphins head coach Adam Gase went on a bizarre rant after Ryan Tannehill came down with a mysterious, sudden injury and could not play

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Saudis reportedly preparing to claim Jamal Khashoggi killed as a result of a botched interrogation

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jamal khashoggi

  • The Saudi Arabian government is preparing to a release a report claiming Saudi journalist Jamal Khashoggi was killed as a result of a botched interrogation, CNN reports.
  • It comes as Saudi Arabia has denied involvement in his disappearance.
  • President Donald Trump told reporters Monday that Saudi Arabia's king strongly denied any involvement in Khashoggi's disappearance. 
  • Khashoggi went missing after entering the Saudi consulate in Istanbul earlier this month.

The Saudi Arabian government is preparing to a release a report claiming Saudi journalist Jamal Khashoggi was killed as a result of a botched interrogation, CNN reports.

The interrogation was reportedly supposed to lead to Khashoggi's abduction from Turkey. According to CNN, the report will likely claim the interrogation was conducted without clearance or transparency. 

The CNN report comes hours after President Donald Trump told reporters that King Salman of Saudi Arabia strongly denied his government had any involvement in Khashoggi's disappearance and said "rogue killers" could be responsible.

Khashoggi disappeared after entering the Saudi consulate in Istanbul on October 2 to obtain documents to marry his fiancée, Hatice Cengiz. 

Cengiz said she waited outside the consulate for hours but Khashoggi never came out. 

Saudi Arabia has strongly denied any involvement in the reporter's disappearance and claimed Khashoggi left the consulate, but provided no evidence to back up their claims.

Turkish officials have accused Saudi Arabia of sending in a 15-man team to interrogate, kill, and dismember Khashoggi's body with a bone saw before flying it back to his native country. 

Khashoggi was once a prominent member of the Saudi kingdom and a top adviser to the royal family. But he left Saudi Arabia roughly a year ago over fears for his safety after writing articles critical of the government, particularly Crown Prince Mohammed bin Salman. 

Khashoggi was US resident and wrote articles for The Washington Post, splitting his time between Virginia, London, and Istanbul since he left Saudi Arabia in June 2017. 

In a "60 Minutes" interview that aired on Sunday, Trump said there would be consequences if it turned out Saudi Arabia had anything to do with Khashoggi's mysterious disappearance.

But has has also expressed a reluctance to punish the kingdom economically or militarily, especially in terms of reducing the sale of billions of dollars worth of US arms to the Saudis. 

SEE ALSO: Trump touts Saudi king's 'very strong' denial and says 'rogue killers' could be responsible for Khashoggi disappearance

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25 reasons why Halloween is our favorite holiday

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Halloween trick or treat

Anyone who thinks Halloween is the worst is no fun.

There are cool costumes, tons of candy, and the best part is that everything is optional. Between this, and the fact that it takes place during the coziest time of year, Halloween really can't be beat.

From the decorations to the haunted houses, keep scrolling to see all the reasons Halloween is the best.

You have an excuse to eat tons of candy.

If you're too old to trick-or-treat, just buy your own candy. It's Halloween! Stock up on limited-edition candy to enjoy the holiday year-round.



You inevitably have tons of candy left over.

There are plenty of ways to make your candy last as long as possible. As long as you store it properly, you can enjoy one of the best parts of Halloween for a solid while.



It's fun to dress up as someone else.

Dressing up is one of the most fun parts of Halloween, because who doesn't like getting to be someone else for a day? 

Even better, it's a great way to showcase your creativity.



See the rest of the story at Business Insider

Sears craters after filing for bankruptcy (SHLD)

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Eddie Lampert Sears

  • Sears Holdings filed for Chapter 11 bankruptcy early Monday morning.
  • The iconic American retailer will close 142 stores by year end and Eddie Lampert will step down as CEO but remain chairman.
  • Shares fell more than 14% on Monday, hitting a record low of $0.28 apiece.
  • Watch Sears trade in real time here.

Sears Holdings shares traded down more than 23% Monday, hitting a record low of $0.28 apiece, after the company filed for Chapter 11 bankruptcy early Monday morning. 

The iconic American retailer, which has seen sales cut in half since 2014, announced it would close 142 stores before the end of year and that CEO Eddie Lampert will step down. Lampert will remain the company's chairman. 

"Over the last several years, we have worked hard to transform our business and unlock the value of our assets," Lampert said in a statement on Monday.

"While we have made progress, the plan has yet to deliver the results we have desired, and addressing the company's immediate liquidity needs has impacted our efforts to become a profitable and more competitive retailer."

After topping out at more than $122 a share in 2007, Sears' stock has lost nearly all of its value as it has struggled with shifts in consumer spending, and the rise of e-commerce, among other things. 

Sears

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A high school principal was ousted after reportedly forcing a student to remove a Trump jersey at a patriotic-themed football game

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Harnett Central High School

  • Harnett County Schools in North Carolina announced Friday that Harnett Central High School's principal, Cindy Gordon, would be replaced. 
  • It came a week after Gordon was criticized after asking 18-year-old student Matthew Collins to take off a Trump jersey he had worn to a football game. 
  • Students at the football game had been encouraged to wear patriotic clothing.

A high school principal in North Carolina has been ousted after asking a student to remove a President Donald Trump baseball jersey during a patriotic-themed football game.

Harnett County Schools announced Friday that Harnett Central High School's principal, Cindy Gordon, would be replaced by the principal of Harnett Primary, Catherine Jones.

A week earlier, Gordon was criticized after asking 18-year-old student Matthew Collins to take off a Trump jersey had had worn to a football game where students were encouraged to wear patriotic clothing, according to WTVD.

The jersey Collins wore was red, white, and blue, and featured "USA" and the Statue of Liberty's torch on the front, with "Trump" and the number 45 on the back.

Collins's father, Mike, said that his son was "humiliated" and that the jersey had been a gift from a family friend.

"We don't want any kids violated. We don't want to see kids embarrassed over something like this," Mike Collins said. "[Matthew] was not disrespectful. He was not acting in a manner that would cause attention to him."

Collins, who is registered as a Democrat, said his son's shirt was not disruptive.

"We're not promoting Donald Trump. He's our president,” he told WTVD. “Again you've got to respect your president. I can assure you that there was nothing about this shirt that was disruptive. I think we should stand up for our rights."

The school district said it removed Gordon from her position after a review of the incident.

"We want to emphasize that Harnett County Schools supports and affirms students' rights to express themselves —including wearing clothing expressing political messages or supporting political candidates or officeholders — in ways that are not expected to disrupt school or school events," the district said in a news release.

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Facebook announced a $200 camera for your home the same week it revealed 30 million accounts were hacked (FB)

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mark zuckerberg happy handshake

  • On September 28, Facebook VP Guy Rosen wrote a blog post announcing a "security issue affecting almost 50 million accounts," where unnamed attackers used a vulnerability to access millions of users' accounts.
  • Facebook followed up on the security incident last week, and sent notifications to 30 million users on Friday detailing what personal data of theirs had been accessed by the attackers.
  • Earlier that same week, on October 8, Facebook announced a $200 camera-and-microphone device for the home, called Portal, for video calling.
  • People are skeptical of Facebook Portal, considering its recent scandals involving privacy and data collection.

Part of Facebook’s goal is to connect people — friends, family, and even strangers — by creating technology that facilitates communication and human interaction.

And so, it makes sense that Facebook would build a device for real-time video calls — like Apple’s FaceTime, but in a standalone device that can plug into Facebook’s massive address book known as Messenger.

Facebook unveiled such a device last week — two, in fact — called Portal and Portal+. Portal features a 10.1-inch display and costs $199, while the 15.6-inch Portal+ costs $349.

facebook portal

This should be an exciting moment for Facebook: It’s the company’s first piece of self-made hardware, and it's directly related to the company’s mission statement.

But, as with many things in life, timing is everything.

The scandals keep on coming

Facebook was reportedly planning on unveiling the Portal back in May, but decided against it. A Bloomberg report said Facebook was still reeling from the public outcry over revelations that UK consulting firm Cambridge Analytica had improperly accessed the personal data of  87 million users and then used that data to influence the users with political ads. People were very upset; It didn't seem like a good time for Facebook to hawk a camera-and-microphone device for the home. 

Unfortunately, Facebook chose last week to reveal the Portal device — and the timing wasn't much better.

Just four days after Facebook announced Portal, the company announced in a blog post that 30 million Facebook accounts were hacked by unnamed attackers. On Friday, Facebook users began receiving notifications from the company detailing the types of information (phone numbers, birth dates, etc) the hackers took. 

Facebook had previously updated the public on “a security issue affecting almost 50 million accounts," on September 28, so the company had ample time to delay the Portal announcement. But that didn't happen, and people learned about the Portal the same week they learned their Facebook accounts were hacked.

As you could guess, the Portal announcement did not play out well online, among critics or anyone else, really.

We reached out to Facebook to learn more about the timing around Portal's announcement.

What ultimately matters is what customers think

Beyond the initial reactions, it will be interesting to see what people think once they get Facebook Portal into their hands.

As I haven’t tried the device myself, I can’t say whether or not it’s worth its $200 or $350 price. What I will say, though, is that on paper, it has most of the same features you can get elsewhere. 

Facebook Portal can make video calls, of course, and you can also use it to view Facebook Watch videos, look at your Facebook photos or albums, or listen to music through Spotify or Pandora. In the words of Tim Cook, “that’s it!”

Maybe you want a large tablet in a specific part of your home to take video calls, and that’s great. But most services you're getting on Facebook Portal are available elsewhere: You can make video calls from your phone, tablet, or laptop, plus you can use any of those devices to look at photos and videos, or listen to music.

From a privacy perspective, Facebook's Portal raises the same concerns as other passive-listening smart home appliances from the likes of Google, Amazon and Apple. Facebook's poor track record with privacy might make you more weary of their product, but letting any company (even a company that doesn't have an advertisting-based business model) put a microphone and video portal in your living room is a risky proposition.

Ultimately, people may not think about Facebook’s history with data collection and privacy when they’re considering this device. They will buy it, and keep it, because they like what it can do.

SEE ALSO: A legendary gadget brand is making a comeback with a plan to fight app addiction by making a smaller smartphone to go with your regular one

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A New Jersey man says he has eaten plain cheese pizza for dinner every night for the last 37 years

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cheese pizza

  • Mike Roman, a man from Hackensack, New Jersey, says he has eaten pizza for dinner every night for the last 37 years.
  • In addition to his daily cheese slice, the 41-year-old teacher also eats a peanut butter sandwich for lunch.
  • He said he's healthy because "pizza has three of the four basic food groups."

A North Jersey man says that for the last 37 years, he has had pizza for dinner every night.

Mike Roman, who is from Hackensack, New Jersey, went on Tom La Vecchia's "New Theory" podcast to discuss his dietary habit. We first saw the story when the North Jersey Record reported it.

Speaking to La Vecchia, who he met at a pizza shop when they were teens, 41-year-old Roman said his pizza habit started when he was a picky eater as a child.

When Roman was 4-years-old, his mom gave up on trying to cater to his fickle eating habits and started letting him have pizza for dinner every night.

Nearly four decades later, his tastes haven't deviated much, as he said he still eats plain cheese pizza for dinner every night.

"Every day I'm just as fascinated as the day before," he said.

Roman said he never gets bored of pizza.

"I don't know," he said. "Dinner to me is nothing really that special."

On the podcast, Roman said he doesn't just have a standard dinner. The elementary school teacher said he also eats a peanut butter sandwich for lunch every day. Sometimes he also has pizza for lunch, too.

The 41-year old says that he has lived in the same town, listened to the same music, watched the same movies and TV his whole life, and eaten the same food his whole life because he likes routine.

And Roman says he's in perfectly good health, as "pizza has three of the four basic food groups." Lest anyone forget that Congress called pizza a vegetable on a technicality in 2011 because "an eighth of a cup of tomato paste is credited with as much nutritional value as half a cup of vegetables," per the Washington Post.

Although that's not to say that pizza is entirely devoid of any nutritional value. Earlier this year, Chelsey Amer, a registered dietitian, told the Daily Meal that a slice of pizza is a more well-rounded breakfast than a bowl of cereal and milk.

But the US government's dietary guidelines recommend adults try to make half their plate fruits and vegetables, so Roman could probably benefit from adding some toppings to his cheese pizza, or adding a salad on the side.

The New Jersey man isn't the only person to get national attention for a repetitive diet. In 2016, Andrew Hawryluk ate the same order from Chipotle for 186 days straight. There's also Theresa Rowley, who says she lived to be 104 by drinking a can of Diet Coke every day.

Sometimes, it pays to be a creature of habit.

Visit INSIDER's homepage for more.

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Stocks end lower as Wall Street remains on edge

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Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., January 26, 2018. REUTERS/Brendan McDermid

Wall Street remained on edge Monday as all eyes were on rising US rates, trade tensions, and the prospect of dampened economic growth across the world. 

The three major US indices wavered throughout the day and then turned negative in the final hour of trading, extending losses of about 4% each last week. Technology stocks were among the hardest hit, with the Nasdaq Composite down 0.9%. The S&P 500 fell 0.6% to below its 200-day moving average, and the Dow Jones industrial average trimmed more than 0.5% from session highs. 

"The pullback in US stocks reflect a host of different factors but the range break of real yield introduces fresh uncertainty around the world's financial plumbing," Mark McCormick, a strategist at TD Securities, wrote in an email. 

Treasury yields were little changed, with the 10-year at 3.15% and the 2-year at 2.85%, following weaker-than-expected economic data. With the prospect of continued tightening by the Federal Reserve in mind, investors had sold off bonds last week and sent yields to 7-1/2-year highs. 

Not helping risk-off sentiment, data showed the US government deficit hit its highest level since 2012 this year amid increased spending and tax cuts. According to the Treasury Department, the federal budget deficit surged by about 17% to $779 billion in fiscal 2018. 

During premarket trading, a closely-watched measure of consumer spending came in well below economist expectations for a second month in a row. US retail sales barely budged in September, the Commerce Department said, up 0.1% in September. Economists polled by Reuters had forecast a 0.6% gain. 

Separately, Sears Holdings filed for bankruptcy protection early Monday. The 125-year-old parent company of Sears and Kmart plans to close at least 142 stores.

Diplomatic tensions between the US and Saudi Arabia over the disappearance of a Washington Post journalist offset demand concerns and pushed oil prices, with Brent gaining nearly $1 a barrel before trading flat in the afternoon. 

CNN reported Saudi Arabia is preparing to acknowledge Jamal Khashoggi, a critic of Crown Prince Mohammed bin Salman, was killed after entering their consulate in Istanbul nearly two weeks ago. Riyadh has denied involvement in his disappearance in recent weeks.

Over the weekend, President Donald Trump threatened Saudi Arabia with "severe punishment" if the government is found responsible. The oil-rich country, which signaled it could retaliate with economic penalties, is set to play an even more crucial role in maintaining global supply when US sanctions against Iran kick in next month.

A measure of expected volatility on the S&P 500, the Cboe Volatility Index, slipped but remained above the key level of 20. Also known as Wall Street's "fear index," the VIX tends to rise when stocks are down. 

SEE ALSO: Global stock market sell-off resumes as Saudi sanction fears push oil higher

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Crypto firm Coinbase is opening a Dublin office as 'Plan B' for Brexit

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puppies in the Coinbase office

  • Coinbase, one of the most prominent cryptocurrency exchanges, has announced plans to open an office in Ireland's capital, Dublin.
  • The announcement is part of the company's contingency planning for a no-deal Brexit.
  • "As we plan for all eventualities, it’s important that we continue servicing our customers across Europe, and Ireland would be our preferred choice there if it comes to it," UK CEO Zeeshan Feroz said.

Coinbase, one of the most prominent cryptocurrency exchanges, has announced plans to open an office in Ireland's capital, Dublin, as it makes contingency plans for Brexit.

The exchange says it is opening the Dublin office partly to serve rising demand from the European Union, but also as a means of ensuring it can keep all of its operations going in the event of no deal being reached between Britain and the EU during Brexit talks.

"To begin with we’re housing a significant support team there, and we’re looking to capitalise on the talent pool that’s available to us in Ireland and hire other folks,"Zeeshan Feroz, Coinbase's UK CEO told The Guardian.

"It is also a plan B for Brexit," Feroz added.

"As we plan for all eventualities, it’s important that we continue servicing our customers across Europe, and Ireland would be our preferred choice there if it comes to it."

Up until now, relocation of offices and staff to EU27 countries has largely been limited to major financial institutions, with the likes of Barclays and Bank of America Merill Lynch both announcing plans to move staff to Dublin, and many other firms shifting staff to cities including Paris and Frankfurt.

Crypto companies, however, have been less forward in their contingency planning. Feroz said that Coinbase's move reflects the fact that it is regulated by the Financial Conduct Authority as a financial institution.

"Clearly as a regulated financial institution, if we don’t have access to passporting, we have to look for alternatives," he said.

Passporting rules allow EU finance companies to sell their services across the 28-member bloc with a local license, rather than getting a license to operate in each member country where it does business. The rights are tied strongly to membership of the European single market, and as a result will be lost once the UK drops out of the EU.

The threat of losing passporting rights is the biggest concern for the finance industry, and has been the main driver in firms moving EU jobs to cities outside the UK.

SEE ALSO: 10 things you need to know in markets today

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'Our industry has lost a pioneer': Tech titans are devastated by the death of Microsoft cofounder Paul Allen

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Paul Allen

Some of the most prominent tech leaders on the planet have paid tribute to Paul Allen, the cofounder of Microsoft who died on Monday at the age of 65. 

Amazon CEO Jeff Bezos, Apple CEO Tim Cook, and Google CEO Sundar Pichai were among those to celebrate the mark that Allen left on the tech world. 

He died from complications relating to non-Hodgkin's lymphoma, a cancer he was first diagnosed with in 2009. Allen disclosed earlier this month that it had returned after a period of remission.

Scroll on to see how tech leaders responded to news of Microsoft cofounder Paul Allen's death.

Jeff Bezos: "He was relentless to the end."

"Very sad to hear of Paul Allen’s passing. His passion for invention and pushing forward inspired so many. He was relentless to the end. My heart goes out to Paul’s family and friends."

Amazon CEO Jeff Bezos on Twitter



Tim Cook: "Our industry has lost a pioneer."

"Our industry has lost a pioneer and our world has lost a force for good. We send our deepest condolences to Paul’s friends, the Allen family and everyone at Microsoft."

Apple CEO Tim Cook on Twitter



Satya Nadella: "I have learned so much from him."

"Paul Allen’s contributions to our company, our industry and to our community are indispensable. As co-founder of Microsoft, in his own quiet and persistent way, he created magical products, experiences and institutions, and in doing so, he changed the world."

"I have learned so much from him — his inquisitiveness, curiosity and push for high standards is something that will continue to inspire me and all of us at Microsoft. Our hearts are with Paul’s family and loved ones. Rest in peace."

Microsoft CEO Satya Nadella on LinkedIn



See the rest of the story at Business Insider

BlackRock beats expectations, as earnings increase 27% (BLK)

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Larry Fink Blackrock

BlackRock, the largest asset manager in the world, reported third-quarter earnings Tuesday, beating expectations with adjusted earnings per share of $7.52.

Earnings were up 27% on the heels of lower taxes and a higher nonoperating income. Analysts had expected the New York-based asset manager to report adjusted earnings per share of $6.84. 

Assets under management increased 8% from the year-ago period, to $6.4 trillion. 

Here are the rest of the key numbers:

  • Revenue: $3.6 billion, beating expectations by $100 million
  • Net income: $1.2 billion, up 29% from 2017
  • Adjusted earnings per share: $7.52
  • Assets under management: $6.4 trillion, under analysts' expectations of $6.52 trillion
  • Total net flows: Outflows of $3 billion 

“BlackRock generated $11 billion of long-term net inflows in the third quarter, despite more than $30 billion of institutional non-ETF index equity outflows that resulted from de-risking associated with ongoing divergent monetary policy and geopolitical uncertainty," CEO Larry Fink said in an earnings statement. "Over the last twelve months, total net inflows of $177 billion reflect continued growth in key areas of our business, including iShares, multi-asset solutions, illiquid alternatives and Aladdin."

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Beyoncé, Sean Hannity, and LeBron James lead the list of most politically divisive celebrities in the US

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beyonce jay z kanye west kim kardashian

  • Beyoncé is the most politically divisive celebrity in the US, followed by Sean Hannity, Rush Limbaugh, Ellen Degeneres, and LeBron James, according to a new poll published on Monday.
  • Among the top 25 most polarizing celebrities, Sean Hannity and Rush Limbaugh were the only ones that Republicans favored more than Democrats. 
  • Scroll down to see the full list.

Beyoncé, Sean Hannity and LeBron James are the most politically polarizing celebrities in the US, according to a new poll published on Monday

The survey, conducted by research company Morning Consult, asked more than 6,000 adults whether celebrities influenced them to vote for a particular political party or if they favored a certain entertainer because of their political views.

The poll also asked Americans how they felt about celebrities on the list of Forbes' 100 highest-paid entertainers, which included actor George Clooney, singer Katy Perry and basketball player Stephen Curry.

It had a margin of error of 2 percentage points.

beyonce hillary

The poll found that Beyoncé divided members of the two political parties more than any other celebrity, with a 66% difference in net perceptions between Democrats and Republicans.

The 37-year-old singer, who endorsed Hillary Clinton in the 2016 presidential election, had a net favorability rating of +63 among Democrats, compared to -3 among Republicans. 

Conservative media personalities Sean Hannity and Rush Limbaugh, whose names appeared directly under Beyoncé as the second and third most divisive celebrities, were the only celebrities among the top 25 that Republicans favored more than Democrats.

Among the top 100 most divisive celebrities in the US, the average net favorability ratings among Democrats was +38 while that average was +24 among Republicans. 

sean hannity

Talk show host Ellen DeGeneres was the fourth most divisive celebrity followed by Lakers star forward LeBron James. 

Though DeGeneres had a net favorability of +19 among Republicans, the talk-show host enjoyed a net +75 rating from Democrats, causing her to be so high on the list.  

James, who called Trump a "bum" for dividing the country, has a 50% gap in net favorability between members of the two parties. 

Kanye West and Taylor Swift are two notable household names who recently voiced their political opinions that didn't make the list. West hasn't shied away from his support of Trump, and recently met with the president at White House to discuss creating more job opportunities for former prisoners.

Earlier this month, Swift also endorsed Democratic candidates in Tennessee ahead of the state's midterm elections, causing a tremendous increase in voter registration

Lebron James

These are the top 25 most politically divisive celebrities in the US, according to the survey:

1. Beyoncé

2. Sean Hannity

3. Rush Limbaugh

4. Ellen DeGeneres

5. LeBron James

6. Jay-Z

7. Katy Perry

8. Lady Gaga

9. Rihanna

10. George Clooney

11. Nas

12. Dave Chappelle

13. Drake

14. Bruno Mars

15. Stephen Curry

16. J. Cole

17. Pink

18. Elton John

19. Kevin Durant

20. Kendrick Lamar

21. Sean Combs

22. Kenny Chesney

23. Kevin Hart

24. The Weeknd

25. Kyrie Irving

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Prince Harry has met the same 98-year-old royal superfan on his last 3 trips to Australia, and the photos are adorable

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Prince Harry Daphne Dunne Australia

 

  • Prince Harry had a cute reunion with 98-year-old royal superfan Daphne Dunne on Tuesday, the third time the pair has met.
  • Harry introduced Dunne to his wife, Meghan Markle, who was aware of the pair's history and said that photos of their previous meetings were "very sweet."
  • Meghan and Harry are in Australia for their first official royal tour, and will also visit Fiji, Tonga, and New Zealand.

Prince Harry met a 98-year-old royal superfan for the third time on Tuesday, the third time she has made sure to be at the front of the queue to see the prince in Australia.

Harry caught up with Daphne Dunne, a war widow and enthusiastic royalist, who was also there for his visits in 2015 and 2017.

The two shared a hug outside the Sydney Opera House on Tuesday, and Dunne was introduced to Meghan Markle.

"I'm so happy to finally meet you. I've heard so much about you," Markle said.

Harry complemented Dunne's shoes and hair, while Meghan said that she had seen photos of Harry and Dunne's previous meetings, which she called "very sweet."

They also discussed Meghan's pregnancy, which Dunne said was "marvelous" news.

"Hopefully next time we see you we’ll have a little one with us," Meghan said.

You can watch the moment here:

Dunne told the Today Show that her love of Prince Harry was born from his work with war veterans. Her husband, Lieutenant Albert Chowne, died in 1945 aged 25 and was awarded a Victoria Cross medal for bravery after his death.

Dunne wore the medal on her chest during their first meeting.

Harry first met Dunne outside the Sydney Opera House in 2015, after a month-long deployment with the Australian Army.

Prince Harry Australia Daphne Dunne

The pair laughed and posed for photos, and Dunne gave him a kiss on the cheek.

Prince Harry Australia army Daphne Dunne

The pair met again in 2017 when Harry visited Australia to launch the Invictus Games, a sports event for injured servicemen and women started by Prince Harry.

Harry seemed delighted to see Dunne, then 97, in the crowd, and they both seemed unbothered by the pouring rain.

Prince Harry Australia Daphne Dunne

Prince Harry Australia Daphne Dunne

Harry and Meghan are in Australia for their first official royal tour, where they will also visit Fiji, the Kingdom of Tonga, and New Zealand.

They are following in the footsteps of Prince Charles and Princess Diana, who went on their first royal tour to Australia and New Zealand in 1983.

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Tucker Carlson says he 'can't really go to restaurants anymore' because people keep screaming profanities at him

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tucker carlson

  • Tucker Carlson says that so many people shout curse words at him in public that it's impossible for him to eat out.
  • Carlson, who hosts Fox News's primetime show "Tucker Carlson Tonight", says he has coped by finding one place where he can eat in peace. He didn't name it.
  • He told National Review podcast "The Jamie Weinstein Show" on Monday "having someone scream, 'F--- you!' at a restaurant, it just wrecks your meal."

Fox News host Tucker Carlson said he can't go to restaurants in Washington, DC, anymore because he gets "yelled at" by other diners, who shout curse words at him.

Speaking to the National Review's "The Jamie Weinstein Show" on Monday, Carlson said: "I don’t feel threatened, but having someone scream, ‘F--- you!’ at a restaurant, it just wrecks your meal."

He told Weinstein: "I can’t really go to a lot of restaurants anymore because I get yelled at."

Carlson said he only goes to one restaurant regularly now: "I go there because I love it and nobody hassles me." 

"I can't wait for this revolution to end, so I can go back out to dinner."

In the interview Carlson also spoke about his early support for the Iraq War, praised President Donald Trump's "bravery," spoke about his new book "Ship of Fools," and gave his view on the current state of US politics.

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Conor McGregor is being ridiculed online after a hopeless attempt at throwing a football — but he says he just didn't want to rip his suit

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UFC fighter Conor McGregor is seen on the sidelines before an NFL football game between the Dallas Cowboys and the Jacksonville Jaguars in Arlington, Texas, Sunday, Oct. 14, 2018.

  • Conor McGregor seems to be enjoying himself since losing to Khabib Nurmagomedov in the fourth round of UFC 229.
  • The fighter has been seen partying with Drake, promoting his whiskey brand and, now, playing football with the Dallas Cowboys.
  • McGregor attended the NFL match-up between the Cowboys and the Jacksonville Jaguars courtesy of the Texas club's owner Jerry Jones.
  • Before the game, the Irishman had the opportunity to toss the pigskin around — and he made a total mess of it.
  • A slow-motion clip of McGregor throwing a football has since gone viral, with people on social media saying it looked like he was tossing a loaf of bread.
  • McGregor excused himself on Instagram, saying he just didn't want to tear his custom suit from his clothing line, August McGregor.

Conor McGregor swapped the Octagon for the football field on Sunday — but he probably shouldn't think about giving up the day job any time soon.

While McGregor famously swapped fighting disciplines to take on Floyd Mayweather in the boxing ring, he showed the NFL was a stretch too far when he was given a ball to toss before the Dallas Cowboys took on the Jacksonville Jaguars in Texas.

McGregor was attending the match as a guest of Cowboys owner Jerry Jones, whose team later went on to win the match 40-7.

The team's thunder was stolen, however, by a totally hapless throw attempt by the UFC fighter, which was caught in glorious slow motion.

People on Twitter were quick to make light of the situation, with some saying it looked like he was throwing a loaf of bread or a shot put.

Always ready with an excuse, though, McGregor took to Instagram to defend himself.

"Hahaha yous'r [sic] f------ ruthless on this side," he captioned the post, which was a meme of him throwing the football.

He said his poor throwing form was down to his tailoring, which he wanted to protect.

"I just didn't want to rip my custom @augustmcgregor baby blue billionaire blazer. That was all, y'all."

He added: "Great job to the Cowboys today! It's a Proper giddy up tonight in Dallas and I LOVE IT, see yous [sic] soon."

McGregor tagged his clothing line, August McGregor, which was made in collaboration with renowned California-based tailor David Heil, the founder of David August.

Both McGregor and his last opponent Khabib Nurmagomedov are facing suspensions from the Nevada Athletic Commission after UFC 229 erupted in a post-fight brawl.

The commission plans to hold a hearing on October 24 to vote on whether either or both fighters' suspensions should be extended.

That doesn't seem to be bothering McGregor, though, who has been seen partying with rapper Drake and promoting his whiskey brand — Proper No. Twelve— since losing to Nurmagomedov in Las Vegas.

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Europe is killing it in crypto

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Token sales ICO

  • The value of "token sales" in Europe this year is about $4.1 billion, far above the $2.6 billion in the US and $2.3 billion raised in Asia.
  • Until the crash of 2008 it was the banking industry that siphoned off Europe's top minds. Not anymore.

In the race to be the world's dominant crypto region, European countries are crushing their peers in the US and Asia.

The value of "token sales" in Europe this year is about $4.1 billion, far above the $2.6 billion in the US and $2.3 billion raised in Asia. In a token sale — also known as an "initial coin offering," or ICO — a quantity of cryptocurrency is sold in the form of "tokens." See Europe's ICO dominance in the chart below: 

VC ICO

Fabric Ventures, a VC fund, released a report today outlining some of the reasoning behind Europe's token cash boom. 

More developers

According to Stack Overflow, Europe houses 5.5 million developers compared to 4.4 million in the US. And European universities churn out twice as many STEM PhDs as the US. The technical talent has always been there, but until the crash of 2008 it was the banking industry that syphoned off the top minds. Not anymore. "With this wave that’s democratizing access to capital, the technical talent doesn’t need to migrate to the US to raise venture capital and build global companies," the report said. 

Favourable regulation 

France “won’t miss out on the blockchain revolution,” according to economy minister Bruno Le Maire, and wants to become a global hub for ICOs. Switzerland has set out similar goals, while the UK has created a crypto assets task force

The report says it has become a fierce competition to offer "the most founder-friendly & forward thinking regulatory environment for decentralized networks and their native crypto-assets."

The nature of European "city-states"

Europe has 50 countries, and some of those economies are small. And, frankly, some aren't doing so great. Any budding company in Europe knows it needs to spread internationally from Day One to avoid the traps of small domestic economies. Diverse and multinational teams have become the standard. 

SEE ALSO: The bitcoin market is cratering — but crypto hedge funds launches are soaring this year

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These 28-year-old Londoners are taking on George Clooney's Casamigos tequila with Enemigo, a $5 million luxury brand that means 'enemy' in Spanish

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enemigo founders

  • Robin Clough and Max Davies-Gilbert are the 28-year-old British founders of luxury tequila brand Enemigo.
  • The brand is taking on George Clooney's Casamigos, which was bought by Diageo for $1 billion in 2017.
  • Enemigo was valued at $5 million after just 5 months of trading in January.
  • It's already in 80 locations in London and is served every 90 seconds during drinking hours.
  • It's slightly more expensive than Casamigos, but the pair believes they have the better product.
  • Enemigo will launch in New York in November.

With 206 million bottles of tequila sold in the US last year (and tequila cocktails even being served at royal weddings), tequila is quickly becoming the spirit of the moment — and there's a new brand coming to town.

Robin Clough and Max Davies-Gilbert are the 28-year-old British founders of Enemigo, the award-winning luxury tequila taking on George Clooney's success story Casamigos, which was bought by Diageo for $1 billion in 2017.

Enemigo has made quite the mark on the drinks scene since its launch in August last year.

In just over a year, it has won five awards across three continents — including Double Gold and Gold at the Global Spirits Comp in Las Vegas, The Master's Medal in the 2017 Luxury Masters in London, and two Double Golds in the China Wine and Spirits Awards in Hong Kong.

According to the brand, an Enemigo tequila is served every 90 seconds between 4 p.m. and 4 a.m. in London, where the brand is stocked in 80 venues including The Ritz, The Connaught, and Annabel's.

And it's now heading to New York, where it says it plans to take on the likes of "Clooney's Casamigos, Patron and Don Julio on their home turf of the US."

Clough and Davies-Gilbert may be the youngest heads of an international luxury spirits brand, but they seem to be onto something.

Tequila is currently the fastest growing spirit in the US, according to the brand.

A $20 million brand in less than 2 years

Enemigo itself was valued at $5 million following a Series A investment round in January 2018 — and the pair told Business Insider they expect its value to hit $20 million at the close of a Series B funding round in December this year.

Speaking at Annabel's members' club in London, Clough said that he and Max have been friends since they were days old — and added that they've both "always been entrepreneurial."

While studying for his MBA in California, Clough met their third cofounder Sebastian Gonzalez, who took him on a trip to his home of Mexico to visit his friends and family.

"I was exposed to this liquid they called tequila, which was unlike anything we'd ever drunk, or even seen before in the UK," he said. "It was a whirlwind story after that."

He approached Davies-Gilbert — who had studied law before going to work in motor racing — about getting involved.

"I worked for a family office looking after the guys going out to the GP2 Series," Davies-Glibert told Business Insider. "I was working there when Robin sent a message saying, 'We need to get involved in this.' About six months later I went down to Mexico. I said, 'I've got to try this and make sure it's as good as they say.' It was, and I quit."

Clough admitted that they "didn't know much about the process" in the beginning, but the samples they brought back to London "went down incredibly well."

In order to produce the liquid, they teamed up with Maestro Tequilero Enrique Legorreta, a close friend of Gonzalez'.

"Each recipe takes a significant amount of time to do," Davies-Gilbert said. "It's not just sitting there and doing one recipe every hour, [it] took us two and a bit years."

The brand's Enemigo 89 Añejo Cristalino was named because 89 different recipes were tried before they got the right one.

Davies-Gilbert added that the brand uses water that filters down from the Mexican volcano Tequila to produce the liquid.

"What that does, you have 200 million years of volcanic rock that diffuses the water, that minerality and slight taste on the mouth gives it that whole flavour," he said. "It's the entire process that creates this incredibly smooth, easy to drink, but also delicate and complex liquid."

He also claims that the brand's process is "one of the most environmentally friendly in the world."

"We use 50% less water, 60% less power, and no fossil fuels in our production process compared to industry standards," he said. "We burn the agave residue to heat the oven, we don't use gas or oil, anything."

He added that the brand has also put in fair pricing for agave farmers amid an agave crisis "perpetuated by agave prices going up because no one's farming it, then everyone starts farming it and prices go down."

'The enemy of everything that serves marketing over product'

enemigo

The duo claims it cost a total of $35,000 — raised from the "life savings" of the three founders and "a couple of other friends"— to bring the product to market.

From the beginning, Clough said the trio wanted to be "completely different," and put product quality over marketing.

"Enemigo means enemy in Spanish," he explained. "We want to be the enemy of everything that serves marketing first rather than product."

He added that all of the awards Enemigo has won have been based on blind taste tests — "nothing about branding or anything else."

While they started out with a PR company, the brand is now doing all communication with the press themselves — and they're staying away from any work with social media influencers.

"People are getting wise to PR companies going out there and pushing social," Davies-Gilbert said. "It kind of takes away from your message. It's not about the 'Hey, so and so is drinking it, so should you.' If you like it, you should drink it, and you will."

He added: "If you don't come from the industry you're looking at, you have no preconceived ideas of how to act in that industry, so you can just do things differently, which sometimes works out to be possibly better."

'Ours is the real one you can sit there and sip all day'

The tequila is slightly more expensive than Casamigos — it retails at £60 for the Añejo Cristalino (liquid which is aged in American oak then filtered to take away the colour) or £150 for the Extra Añejo (which is rich and deep in colour).

enemigo

While the pair says Casamigos "has done amazing things for the industry and is a seriously impressive brand," they believe that consumers can taste the difference between the two brands.

"Ours is the real one you can sit there and sip all day," Davies-Gilbert said. "If you then sat there and sipped another brand, you would notice the difference."

He added that the idea that you can drink something all day and not get hungover — which was what Clooney and Rande Gerber set out to create when they founded Casamigos — is "bold and definitely not true."

Clough added: "Before Casamigos launched, there was still this growing trend of tequila. Tequila has been growing year-on-year for 13, 14 years at an incredible pace.

"I think the market was looking for someone like Casamigos to come in and refresh the way that a product is marketed, and I think they did a wonderful job. Where we position ourselves against that is they've done incredible jobs with making tequila mainstream, now it's our job to go and really instil, 'this is what a tequila really is.'"

Raising the reputation of tequila

According to Clough, Enemigo is about "raising the reputation of what tequila is and where it should be."

"Tequila has this reputation," he said. "We love breaking that stereotype every time [people] try our tequila. For us, it's about raising it to that next level, being something you do want to give as a Christmas present or serve at your dinner party, even neat, which, especially in the UK is nearly unheard of."

"We'll have people who say, 'Oh no, I don't drink tequila, I don't like tequila,' because their memory is this fire water from university or college years that just kills you," Davies-Gilbert added. "[With Enemigo] they take one tentative sip, and say, 'Oh, no, that is really good.' That moment, I've seen it so many times, it's such a gratifying feeling."

Ultimately, they believe Enemigo is "so simple and versatile it works in every environment."

"Like a cognac or whiskey it's still incredibly complex and smooth," Clough said. "[It's about] finding those moments that just fit into peoples' daily repertoire, that not only takes on the other players in tequila but also take on the big players in whiskey, cognac and everything else. That's how we see ourselves growing at the rate that we need to."

In an increasingly health-conscious world, it also doesn't hurt that a tequila with lime juice has "a quarter of the calories of a gin an tonic," according to Davies-Gilbert.

Drinking it the Mexican way

enemigo champagne flutes

Davies-Gilbert suggests drinking Enemigo on the rocks or with some fresh lime juice on the side.

If it's being used in a cocktail, he added that the brand tries to "emphasise the liquid" instead of cover it up with sugary mixers, like you'll often find in an American-style margarita.

"All of our cocktails are literally just soda water with a bit of lime or a little bit of lime juice," he said. "The best thing about it is neat."

Clough added: "Go back to how they drink it in Mexico... One of the things that took my breath away when we first looked into it [is that] the traditional way to drink it is to have it in a tumbler, and slowly sip it over your meal."

Ultimately, the brand hopes to motivate people to sip tequila or enjoy it with food instead of having it as a shot.

"I'd love to get to the point in the UK where it's in a shot glass but you're sipping it," Davies-Gilbert said — and the brand sometimes even serves Enemigo in long stem Champagne flutes to get the message across.

Taking on New York

enemigo cofounders

Working with New York-based importer MHW, the brand plans to launch into the US in November — and it has appointed Clough as CEO and Max Davies-Gilbert as Managing Director for EMEA. 

While Gonzalez is still based in Mexico where he also works part-time in banking for a family fund, Clough said the three are now "very good friends." Gonzalez was just about to land in London to help the duo talk to accounts when we met.

"We already have about 15 bars or so who have been asking for us, and we've got five to 10 retailers who said they're interested," Clough said of the US expansion.

"We have some exciting announcements coming out once we launch around new product development, and that sort of thing," he said, adding that because of the success in the UK, the brand is also "looking pretty good to be seeding investment towards the end of the year" from the same investors.

"It's a big confidence boost," he said. "We only launched a year ago. It's going to be a fun couple of months coming up."

SEE ALSO: The $1 billion sale of George Clooney's tequila company just made him 2018's highest-paid actor — here's the story of how the brand was set up by accident

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