Most people grew up in car culture, particularly after WW II when the President Eisenhower looked at the transportation system in the USA and bemoaned the time it took to transport military goods across the country. The President’s solution was the interstate highway system which changed the way Americans connected to the car industry as suburbs grew as dominate place for Americans to live. At the time, one of the VP of GM said as GM goes, so does the US and for many years that was true. Times have changed, as European and Japanese companies made inroads into the big 3 of GM, Ford and Chrysler. As oil prices increased, fuel economy increased, hybrids increased market share and the latest is the EV market.

In an article by Eric Reguly of the Globe and Mail, less that a year ago, Chinese carmakers were seen as a threat to their European counterparts. How did that happen?

Nissan is owned by a Japan company, it owns a plant in Sunderland, located in northeast England. It was built to build 600,000 cars a year and has achieved full production in the past. Last year, it produced 300,000 cars or half production. Empty factories are capital killers – sunk costs that bleed cash and lock up liquidity.

In early June, Nissan and Chery, one of China’s biggest EV makers, signed a deal to start producing Chery car brands in 2027.

Stellantis, owner of Jeep, Fiat and Peugeot brands bought 21% of China’s Leapmotor and formed a joint venture to produce EVs in Spain. VW and Chinese XPeng are in talks to share factory capacity in Europe.

In spite of import tariffs in Europe as high as 45%, the Chinese EV companies deliver more bank for your buck.

Data from the International Energy Agency leave no doubt that Chinese EVs are beginning to bury the competition. Last year they accounted for 60% of global EV sales. That’s double the combined total European and American models. In China 55% of new car sales are EVs, the IEA says.

China seems on the verge of dominating the EV industry in the same way it dominates the global solar panel market. About 15 years ago, it used massive state subsidies and capital investment, low-cost financing, engineering expertise and cheap labor to destroy the solar-panel competition. The same formula is being applied to EVs. China also largely controls the production and refining of many of the materials essential for EV production, including graphite, lithium and cobalt.

Joern Buss, head of the Americas automotive practice at the Arthur D. Little business consultancy, says that Chinese EV makers have a virtually unassailable cost advantage. It can take a European auto company 3 to 4 years (36 to 48 months) to develop a new car; Chinese makers can compress their time to 24 to 30 months. The engineering costs are also much cheaper.

The US car industry has a different dilemma. The 100% tariff on Chinese vehicles meant they are priced out of the market under President Trump. If the tariffs fall, what will the American companies do? American consumers at one time very brand loyal, but consumers are more value oriented and less brand sensitive than their European counterparts. When Chinese EVs hit the US showrooms, they will could make American models look like antiques.

The future seems to be the European, Japanese and American carmakers will have to form partnerships with their Chinese counterparts. They may lose their identities to stay alive.

Linking to dividend paying stocks, tariffs have a role to protect companies but eventually the marketplace will decide. At the moment, the moderately priced EVs are better than anything that can be built in America, if that continues to happen GM and Ford will be merging with a Chinese company.

There are more questions than answers, till the next time – to raising questions.

The world runs on credit, there is a donut company that says the America runs on Dunkin, but I digest. Business runs on credit and without credit the economy automatically smaller and it is much harder to do anything, because cash is king. If a region is dependent on tourism, most tourists do not bring lots of cash or travelers checks, they bring their credit and debit cards. You can imagine what happens when a country that relies on tourist dollars suspends the use of credit cards.

In an article by Dave Sherwood and Kylie Madry of Reuters, the country of Cuba suspended VISA and Mastercard transactions by the central bank citing US sanctions. Recently partly because of higher prices of air fuel, the supply of air fuel meant any tourist flying into Cuba could not be guaranteed to fly out.

Cuba’s central bank said a foreign partner that had previously processed credit-card transactions for Cuba had decided to limit operations after a US executive order on May 1 that vastly broadened sanctions on commerce with Cuba.

Credit-card transactions have historically been handled by a foreign bank and Fincimex SA, a financial arm of FAESA, a military-run conglomerate targeted with sanctions by the Trump administrations.

The US accuses GAESA of secretly hoarding profits from the country’s most valuable industries for the benefit of the military and Cuban elite. GAESA denies those claims.

There are speculations that the US will invade Cuba at some point in the next few years, which is why there has been an exodus of businesses from Cuba including foreign hotel, airlines, and global shipping firms.

Linking to dividend paying stocks, if you use Cuba as an example, slowly the sanctions imposed by the US has strangled the economy of Cuba. Similar to most sanctions, it starts slowly and builds stream and eventually everyone sees the results. The issue is when do people react or move to alternatives?

There are more questions than answers, till the next time – to raising questions.

In a globalized world, one of the great things about it is the ability to buy an airline ticket and go traveling. If you ask people what they want to do if they had more money or won some money, travelling would be near the top of the list. The key to travelling is the cost. A number of years ago, in Europe the low-cost airlines made it essentially less expensive to fly than drive and for many years, thousands of people travelled more.

In an article by Anton L. Delgado and Chan Ho-him of the Associated Press, all around the world, economies depend on tourism. In Thailand, tourism contributes 13 % of the GDP, it is 9% of GDP in Vietnam. Tourists bring in much-needed foreign currency for import-dependent economies such as the Philippines and Nepal.

Jet fuel shortages and surging costs have led carriers such as Vietnam Airlines, Air Asia, Cathay Pacific to cut flights and readjusting schedules.

Airspace closures across the Persian Gulf early in the war and the intermittent closures of certain Gulf airports cut off key layover locations for Asia-bound flights or forced commercial airplanes to take longer, costlier routes.

Lavinia Lau, Cathay’s chief customer and commercial officer noted jet fuel prices remain at highly elevated prices and have increased cost pressures.

Higher airfares and weaker travel confidence can quickly spill over into household livelihoods and public venues in economies where visitor arrivals are a major source of jobs, income and foreign exchange, according to a report by the UN Development Program.

Travel is often the first expense people cut when the economy lessens. Although, it is not the same, there are plenty of low-cost experiences that are around where you live, that you may have overlooked or not gone in recent years. In many urbanized areas, there is cottage country not too far away which is good to go on either day trips or weekend trips.

Linking to dividend paying stocks, one of the options with the income you receive from dividends is to travel or save for travelling, it is wonderful to receive the money in the account on a regular basis. As long as the company makes a profit, the shares will tend to trade at a premium and the overall return should be healthy. As long as you are healthy, you can think of where you want to travel to?

There are more questions than answers, till the next time – to raising questions.

One of the reasons dividend investors enjoy being long term investors is the company makes profits on a yearly basis which allows the company to make capital choices. Being biased, returning the company to investors either by dividends or by buying back stock is always a great choice, but investing and expanding the business is also a good allocation of capital.

In an article from Reuters, Eli Lilly’s cash is boosted by demand for its obesity drugs. This allows the company to make acquisitions. The deals mark the renewed move into infectious disease space, as the strategy for Eli Lilly is to prevent disease at its source rather than treat its consequences, says Daniel Skovronsky, Lilly’s chief scientific and product officer. The deal is to $4 billion for 3 companies named Curevo, LimmaTech Biologics, and Vaccine Company.

Citi analyst Geoffrey Meacham said we think this is a well-balanced foray into a new area and each company’s lead asset could bring substantial market opportunity and platform validation for future products.

The focus of each of the vaccine developers highlights viral pathogens linked to long-term neurological and oncology risks, which are in line with Lilly’s existing interests.

Linking to dividend paying stocks, growth is wonderful, but it has to be carefully measured to ensure the growth adds value and make profits. There are often reasons why areas are overlooked and they relate to making money. Why will the area make money for the company. as an investor you need to some element of cynicism in your evaluation. Asking more whys is good?

There are more questions than answers, till the next time – to raising questions.

If you listen to the President, he loves the headline and the headline tends to make things good. In the days gone by the President and Madison Avenue would go hand in hand. Now days, there are still public relations firms on Madison Avenue but it does not have the same weight. In many areas of the economy, similar firms cluster together for example Wall Street means the stock exchange, but the offices are not Wall Street. Anyways, the President says he will have a deal and ships will flow through the Strait of Hormuz.

In an article by Jenny Gross of the New York Times News Service, the reality is a little different than what the President says. In late May more than 1,500 ships are in the Strait ready to move across the oceans. Prior to the war, about 130 ships went through the Straits on anyone day.

Before the ships begin leaving, companies will need to know how their ships will be prioritized, said Jakob P Larsen, the chief safety and security officer of the Baltic and International Maritime Council.

Given Iran dropped mines into parts of the Strait, what routes would the ships take? If the navies of the US, France, Britain and Germany deployed minesweepers, it would take several weeks.

People to run the ships would need to come back from around the world as ships have bare minimum crews as they are stranded in the Gulf.

Rolf Habben Jansen, the CEO of Hapig Lloyd in a podcast that one of his ships went through, but it required a lot of cleaning to get to maximum speed. The warm weather of the Gulf vessels have accumulated barnacles, sea creatures and algae that can impede navigation.

Lasse Kristofersen, the CEO of Wallenius Wilhelmsen, a car shipping and logistics giant expects it would take at least 30 days to 45 days for shipping to return to normal.

All those issues apply to the shipping of oil, once the ships are available and moving, during the war Iran sent missiles into the infrastructure of the Persian Gulf countries oil infrastructure which needs to be fixed, so the oil can reuse pumping.

In the meantime, like the headlines from the President, but be skeptical of the operational expectations.

Linking to dividend paying stocks, when you buy one of these companies you are buying the ability of the company to execute. Execute on their strategy, execute on their plans, execute on their day-to-day operations. Many have demonstrated time and time again they can do it and it gets better every year. We all have high expectations the use of AI will make it easier, but does it? Logistics always needs to be examined.

There are more questions than answers, till the next time – to raising questions.

If you remember a few months ago, the US decided to arrest the President of Nicolas Maduro using the military blockade and special forces to bring him to a prison in New York. At the same time, the Deputy President was elevated to President, and her name is Delcy Rodriguez. No one quite understands why policies automatically changed, but in the intervening months they apparently have.

When Exxon CEO Darren Woods was in front of Congress, he said he would be willing to send in a team to evaluate the situation in Venezuela but he said at the present time it was uninvest able. Time has gone by.

In an article from the New York Times News Service, Exxon is in talks to acquire rights to produce oil in Venezuela for the first time in 2 decades. Exxon first enter the country in the 1940’s and its history includes its subsidiary being nationalized and essentially being kicked out of the country.

The deal could be finalized in a month or so, involves Exxon to produce oil in up to 6 fields in several regions of the country.

After Exxon left Venezuela, it moved to its neighbor Guyana where it has developed major oil fields offshore.

Linking to dividend paying stocks, the CEO of Exxon has said on numerous times that Exxon runs a very disciplined capital allocation program and they need a long-term commitment from the country where they do business. Long-term tends to mean through the electoral process of the country governments will and can change, but Exxon wants to do keep pumping oil no matter who is in power. It is hard to believe that regulatory infrastructure in Venezuela has change that much since the change in Presidency, but the opportunity to be the country maybe just too great not to be there.

There are more questions than answers, till the next time – to raising questions.

If you bought Tesla shares when it went public at $1.56 in 2010 and held onto them for a decade, you would could have sold them for $43 a share, since then the shares have gone up to plus $430 or 10 times. There have been ups and downs with every stock, but you would have done well. Once somebody has a track record, the next possibility to invest with them tends to do well. In the stock market that may or may not be the case.

In an article by Echo Wang and Manya Saini of Reuters, SpaceX showed its financials as it rolls out is IPO. This IPO is different than most companies because it is expected to debut at a trillion dollar valuation and within 2 weeks of the offering, many index funds will need to buy the shares.

SpaceX has 3 parts – Starlink – the satellite division; xAI – the AI division and the rockets division. Many years ago, in a TV shows, young Sheldon asked someone at NASA would it not be cheaper to have the rocket land in the same spot as it took off rather than breaking apart and landing in the ocean? The NASA person said yes, but the technology did not allow that yet. Fast forward SpaceX rockets land in the same spot, it changed the economics of rockets.

Of the 3 divisions, Starlink make the most money; AI loses the most money, and the rockets are the great possibility if things go as technology hopes it does. A question of would you fly in a rocket from San Francisco to Hong Kong? maybe or maybe not, depending on the price. In the prospectus SpaceX believes people would. Would they go into space?

If xAI built data centers in space, they would be cheaper because of the need to cool the centers, but are they viable? As Starlink has more satellites, maybe they will have the expertise to build in space.

Some of the future plans mean a new type of rocket is needed and it is test stage, the flight was supposed to happen in late May, but it could happen in June?

According to Patrick Boyle, the SpaceX is using a valuation multiple of 100 times earnings. Is that too much?

It seems through Class B shareholders 10 votes each, Mr. Musk and a handful of insiders will control the company to a tune of 85% of the votes.

SpaceX reported revenues of $4.69 billion in the first quarter versus $4.07 billion a year earlier.

Linking to dividend paying stock, SpaceX will not pay dividends, and it will use the money from selling stocks to pay down debt and reinvest in the business, but it is a company in the news and remembering Star Trek caption of the Space the final frontier, we are all interested in the company. Will it be a great investment, maybe or maybe not but it will be quite the ride.

There are more questions than answers, till the next time – to raising questions.

Joan is the story of Joan Hannington who was the Britain’s most notorious diamond thief, published by Ebury Spotlight, London, UK, 2002, republished in 2024.

Often times on police shows, you will hear the phrase inside job, because to rob a store, you have to have a reasonable idea of what to steal, the value of the item to buyer, the security inside the store and the ability to escape undetected. All of them you will need some information to pull off the heist. The more information you gather and know, the better the thief you will become.

In the book by Joan, she was working in a jeweler store and was doing her job and learning about the retail process. Her manager and more senior staff had access to the vaults in the back. It happened her manager was caught stealing to pay for his mistress, and Joan was given access to the vaults where the uncut diamonds were kept. She swallowed some diamonds and took them home. Joan also knew if she started to change her lifestyle, where she lived the local police would be curious, she hid the diamonds.

Often when there is a lifestyle change, people wonder how they afford it? If you steal and keep the same lifestyle, then there are less questions, but what will you do with the money? For example, many people know about cars, if you changed your car from a Honda Civic to a Rolls Royce, the dealer would sell you the car, but you would likely have to move because a Rolls Royce would stick out in your neighborhood. Note many people will sell you the lifestyle changes, but eventually there could be inquiries to how?

Joan worked at a variety of jewelry stores before she left the retail world, and before she met someone to take her to the next level. Joan would swallow the diamonds and rings, she was good at nicking them. She would take the jewels to a dealer who would weight them and give her a price she could accept or reject. Often times she accepted. The reality was the dealers were underpaying her, until she knew the value and could bargain with confidence and authority.

Hint: if you want more money, always take out the stones from the rings or sell them separately. The rings or gold bands will tend to be marked, while the stones were not.

One thing she became good at was going in a shop looking like she had a lot of money or dressing the part and do a bait and switch with a fake ring. A partner and Joan would come into a shop, Joan would chew gum, take the real ring and use the gum to attach it under the counter, she would hand back the fake ring with real gold bands to the jeweler who would put it back. She would use a stolen AMEX to make a deposit on the ring. Then 10 minutes after she left the store, a third person would come into the shop, go to the area where Joan stuck the ring under the counter, he would look at rings and find the ring and gum and leave with the real ring. Note all this takes planning and co-ordination to be successful.

Linking to dividend paying stocks, eventually Joan was caught and served time in jail, although she is out of prison. Most of us do not want to go to prison, but everyone to be successful has to become knowledgeable in their field. You need to learn about what is valuable and what is not, in investing how not lose money is a very important lesson to learn. In the stock market there are value traders, they examined stocks selling for less than others and what is the expected time they will rise to the same multiple or more. Knowing value is important to good investing.

There are more questions than answers, till the next time – to raising questions.

If you are a dividend investor, you likely own an utility because many utilities have a monopoly like position in their area of service. In addition, the regulators of the utility tend to increase price of the kilowatt on a regular basis to ensure the profitability of the utility. As an investor there is much to like about utilities.

The big excitement among utilities is AI and the data centers it needs to run the AI models and increasing usage for customers as corporations use AI more and more. Those demand drivers are wonderful news to executives at utilities because they can add more produce more electrical power and the demand from the centers will pay the bills for the added production. This demand is leading to mergers.

In an article from the New York Times News Service, NextEra Energy has announced plans to merge in an all-stock deal with Dominion Energy.

NextEra Energy is based in Florida and the retail brand is Florida Light and Power has a market value of $194 billion while Dominion has a market value of $54 billion. Dominion is based in Virginia and also operates retail utilities in North and South Carolina.

The combined company would serve 10 million customers, and the CEO of NextEra would stay as Chair and CEO while Robert Blue current CEO of Dominion would be CEO of the company’s regulated utilities and be a director. For those being served by Dominion, the name would not change.

The reason for the merger is electricity demand is rising faster than it has in decades and scale matters more than ever.

One should expect more mergers and acquisitions will happen in the utility sector.

Linking to dividend paying stocks, while there is competition in every sector, in the utility sector because of the need for continuous electricity, it was easier to set up a series of independent utilities to ensure the lights do not go out. The system has evolved and many investors have benefited from owning utilities and the dividends continue to be paid. For many years, you would compare the yield or dividend rate against owning bonds, but now there are growth opportunities in the sector. Buy them for the yield, but sometimes a merger will happen.

There are more questions than answers, till the next time – to raising questions.