Every administration can focus on what it believes is the correct path for the country, that is why they were elected. Sometimes it is doing what the others were not doing; it is easy to believe a previous administration was wrong in its policies and fixing that is a top priority. This means every administration picks winners and losers and in the Trump administration oil and gas is a winner and green energy is losers. If you are a business, the government policies can either help or hurt you, because in the oil and gas sector, the Trump administration is cutting regulations, although for a commodity-based product, cutting regulation still requires a higher price to do more. Ideally, the administration wants prices to be lower. If energy prices go higher, people look for alternatives.

For a company, they need to look past the current administration to 5 to 10 years down the road, what will the economy be like? what will customers pay for?

In an article by Jack Ewing of the New York Times News Service, German carmaker BMW said it will be producing electric vehicles by end of the year.

The iX5, a midsize electric SUV will roll off the Spartanburg, South Carolina factory by the end of 2026. By 2030, BMW will be producing 6 electric vehicles at the plant, the biggest and most important part outside of Germany.

BMW exports about half the 400,000 vehicles it produces in South Carolina.

In Europe, electric vehicles account for 20% of total sales, versus 6% in the US.

Other carmakers scrapped plans to make electric vehicles in the US, with Honda stopped plans to build 3 plants or a $9 billion restructuring charge. Ford stopped making the F-150 Lighting and took a $19.5 billion hit. GM and Stellantis revised plans and booked losses on EVs.

The BMW X5 is the best selling model in the US and will come in electric, diesel, and plug-in hybrid versions. BMW will start selling a smaller electric SUV called the iX3 in the fall.

Linking to dividend paying stocks, ideally each administration in Washington is a net positive to the companies you invest in. However, all administrations have people in the Cabinet who favor some industries more than others, it is a normal course of events. Google had a motto do no harm, ideally Washington does no harm to the industries you invest in. Sometimes. politics or ideology or sound bites or something gets in the way. Does your companies have the ability to weather the storm?

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

In every company, they start off with the ability to service the customer at a profit, as time goes on they tend to believe that vertical integration is the key to success and they slowly do build up the company. Sometimes the company wants to buy another company to ensure that revenues come in no matter the economic cycle, the problem is the other company is not really related to the management of the existing company. After a few years they are quietly sold off as the company concentrates on what they know how to make money.

In an article by Aditya Soni and Anhata Rooprai of Reuters, Comcast announced that it will split into 2 companies through a spinoff of NBCUniversal and Sky.

The proposed separation will create one company anchored by Comcast’s cable, wireless and business services arm and the second company around Universal theme parks, film and TV studios, NBC, Peacock and the European media business Sky.

It unwinds 15 years of consolidation at the company that brought together content and distribution, with both feeling the strain from the rapid rise of streaming.

Comcast started off as a cable company, it bought NBCUniversal for $40 billion 15 years ago. The idea was owning the content that people watching cable would pay for.

The rise of Netflix and streaming services means the business plan has competition rather than a built in monopoly. With the rise of Netflix or streaming services, fewer people pay for cable TV. Comcast leans on cable for much of its cash flow.

Comcast co-CEO Mike Cavanagh will run the new NBCUniversal, while Michael Angelakis, will return to lead Comcast as CEO.

Shareholders of the cable and media giant will own stock in both companies. However Comcast through super voting shares owned by CEO Brian Roberts (his Dad, Ralph, founder the company in 1963) will control both companies. Comcast will keep as much as 19.9% in NBCUniversal.

Comcast’s studio business includes Universal Pictures, DreamWorks Animation and Focus Features brought in $11.29 billion in revenue or 9% of the total.

The media business which includes NBC and Peacock, brought in $27.09 billion or 21% of revenue.

The theme parks added $9.84 billion.

The connectivity business generated $70.7 billion or more than half the total revenue for Comcast.

Linking to dividend paying stocks, one of the reasons you like these companies is because they earn profits to pay dividends. All companies buy and sell divisions according to where the executives believe growth will come from as the world of change is around us. Trying to unlock higher shareholder value is a key concept to aspire to.

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

Nobody wants a crisis and everyone prepares for one, but for investors, crisis offer the ability to see the wheat from the chaff or quality from non quality. As an investor, you want to invest in quality stocks that can go through economic cycles, but when the rest of the industry group is suffering, as soon as that portion of the economy moves upward, your investments do better than the industry group. Much of investing is picking a company and then comparing it to how others did. If investing in S&P 500 index is running at plus 10% and you are in a fund with a high fee and averaging 5% return, is it a bad investment? Often times a crisis situation will allow you to reasonably quickly how did companies react to the crisis? In general, a crisis means everyone suffers, but some suffer less.

In an article by Ana Swanson of the New York Times News Service, the crisis of closing the shipping channels of the Strait of Hormuz sent energy prices up which meant that fertilizer and things made from oil and gas went up to. Around the world this caused inflation to rise.

In China, they have largely avoided the inflation spikes because China’s oil and gas reserves and clean energy projects have allowed it to avoid the worst effects of the closing of the Strait.

The consulting group The Asia Group, a Washington area-based consulting firm, examined the economies of Asia since the closing of the strait. One main takeaway is the crisis has demonstrated Beijing’s ability to use prices, export controls, subsidies and a managed currency to absorb shocks to the economy.

The crisis has accelerated growth for clean energy technology such as solar panels, batteries and EVs, industries that China dominates.

It is important to understand that China is dependent on the Middle East for energy and industrial products. Asia sources 80% of its oil and gas through the Strait of Hormuz. The war has impeded the production and movement of certain critical products such as naphtha, used to make plastics and chemicals; helium used to make semi-conductors and MRI machines and sulphur used to refine copper. The companies that use the materials are heavily dependent on the Middle East.

Overall, China drew down its energy reserves and imposed export restrictions and quotas on its oil refineries.

In India, rising prices for fertilizer, fuel and food have stoked political opposition to the government. Note 40% of India’s work force is employed in the agriculture related field.

In Japan, where fuel subsidies are equivalent to half the defense budget. Rising prices and shortages of aluminum and naphtha which are used in making auto parts have led to production cuts and delays for Japanese carmakers.

In Philippines, labor strikes and a declared national energy emergency was declared.

The issue is what happens next, many of the countries have used oil and gas reserves to buffer from the economic effects but those reserves are going down fast. In many capacities, from jet fuel to diesel oil, they are running low.

Linking to dividend paying stocks, hopefully you have bought quality stocks that can deliver profits wherever the economic cycle is located. In times of crisis, some stocks go up and others go down, and that can be a buying opportunity from your dividends. Try to buy the best of the breed at a discount. To do this you should keep a list of companies you wish to buy if the price is low. Crisis tends to offer opportunities, if you are prepared for them.

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

The auto industry around the world is facing a major challenge from Chinese EV carmakers and that will fundamentally change the existing structures. For those who have lived with the existing order, change is relatively easy to see, but it is more difficult to live through. In the world, the biggest 2 automakers are Toyota from Japan and Volkswagen from Germany.

In an article by Christina Amann of Reuters, VW is considering shutting down 4 German factories which would close 4 factories in Hanover, Zwickau, Emden, and Neckarsulm that would put up to 45,000 jobs at risk. That would add to the 50,000 cuts argued to unions in late 2024. Similar to auto plants in America when an auto plant closes down the community where it is located suffers.

The cuts are likely to face strong resistance from unions and the state of Lower Saxony, which is the carmaker’s 2nd largest shareholder.

Porshce SE, the investment vehicle of the Porsche and Piech families and VW’s biggest shareholder. In 2025, financial year the global work force was 667,164 with almost 43% employed in Germany.

Oliver Blume, VW’s CEO plan to restructure the company would include cutting planned investment by about 15% to just over $148 billion over the next 5 years. There are possible spinning off the core of VW brand and parts operations into separate entities.

Linking to dividend paying stocks, the advantage these companies have when there is fundamental change in an industry is the resources to do something about it. They can spend their way either to meet the competition or buy into the competition or something of that nature to preserve their position. Sometimes the money is wasted, sometimes the money is invested well, it depends and only time will tell. As an investor what story do you subscribe to and is the company able to respond well to your story?

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

In the world of shipping there are pinch points or the straits of water are relatively narrow and the world of shipping has operated that the water in the middle is international waters. The waters benefit everyone and is owned by no one, although if a country wishes to have services along the coast that is up to them. If you look to naval battles in the past, some of them result in who controls the straits? When the world is relatively peaceful, the shipping industry says no one.

In an article by Ephrat Livni of the New York Times News Service, Iran is trying to take over the control of the Strait of Hormuz and potentially generate new revenues.

The head of Iran’s primary insurance regulator, Mousa Rezaei said a new insurance company has been established that was dedicated solely to the Strait of Hormuz. The Persian Gulf Strait Authority was created by Iran and demanded that vessels register and sign up for a new mandatory Iranian insurance policy – free for the next 60 days.

Richard Meade, editor-in-chief of Lloyd’s List, a shipping news service said we are in unchartered territory.

The International Maritime Organization – has told the New York Times the insurance requirement has not been officially submitted to IMO is not part of any official record or process.

It was added the right of ships to transit through the passage cannot be suspended or hampered by coastal states and there was no established basis in international law.

Linking to dividend paying stocks, all profitable companies depend on the law to operate and continue. Ideally for multiple generations, and although the law can and does change a bit, the consistency for the long term is the rule of law. You will often see companies that have takeover offers cite the process and the law when the bid is lower than the Board expects.

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

Somewhere around the world there is a crisis for some companies and for the most part they have to learn to adapt to the crisis and live with it. When there is man made crisis such as war, while the world hopes it will be short, the reality is there are many critical issues which pop up at once. If in ideal world, the war is short, it is reasonably easy to adapt to what was before, if the war goes on, then rising prices is a partial answer for companies.

Prior to the US-Iran war, one of the busiest airports in the world was in Dubai which mean many planes flew in Iranian airspace. For the past 50 years, many Gulf States have been trying to diversify their economies and for the Dubai area it meant tourist related facilities. In the US, many Americans think of Orlando on the east coast or Las Vegas on the west coast as tourist dominated cities. The airports were expanded; there are multiple entertainment facilities and lots of hotels and hospitality infrastructure. For Dubai, it has many hotels, entertainment facilities, expanded airport and people from across Europe and Asia coming to visit.

In an article by Rajesh Kumar Singh, Alessandro Parodi and Joannna Plucinska of Reuters, airlines which increased their prices due to the US-Iran war are expected to slowly lower them now there is a signed MOU to stop the war. This slow expectation has the result of airlines saving billions of dollars on jet fuel and keeps prices for an airline seat above prewar levels.

There is a slow process for the processing system to lower prices as the infrastructure is rebuilt in Iran and other states on the Persian Gulf.

Jet fuel spot prices on June 17 were $2.85 a gallon, in early April it was $4.88. A decline of that size would cut the US airline industry’s annual fuel bill by more than $40 billion, if sustained, according to a Reuters calculation based on industry fuel consumption.

Industry data show jet fuel prices more than 3 times as fast as airfares from January to May. Deutsche Bank estimated US carriers would recover only 60 cents of every additional dollar spent on fuel. Alaska Air said it was recovering 1/3 of the increase. Delta, United and American Airlines were all in the 40-50% range and discount airlines JetBlue and Frontier was less than 50%.

United CEO Scott Kirby told Reuters his airline was getting closer to recoupling the fuel-cost spike through pricing – we are on a path to recover 100% by the end of the year.

Raymond James showed fares increased 34.1% from a year earlier.

Dudley Shanley, head of aviation and travel research at Dublin based Goodbody, noted lower prices will take time to feed through to jet fuel, and unless jet fuel falls back toward start-of-year prices, airlines are likely to keep fares firm or push them higher.

Europe may see a split, long-haul fares are more likely to ease because airlines passed on higher fuel costs

In Asia, HSBC analysts said China’s Big 3 airlines face weak pricing power and falling aircraft utilization, while Hong Kong’s Cathay Pacific is better placed as higher fares, cargo revenue and premium demand could offset fuel costs.

In the Middle East, one can expect promotions to win back traffic.

According to the IATA or International Air Transport Association jet fuel costs are 54% higher than a year ago.

Jefferies estimates each 5% drop in its roughly $3 a gallon 2027 fuel cost forecast would lift projected earnings per share by 10 to 15% for Delta, Southwest and United and as much as 50% for American Airlines.

In the past US fuel cycles, falling oil prices often triggered a capacity race than push fares lower. Those conditions are not broadly in place right now. Aircraft deliver delays (by Boeing), tight airport capacity (fewer open gates at airports) and weaker low-cost carriers are limiting a price war. US domestic airline seats are looking at a 0.4% growth rate down from 4.6% before the war.

Linking to dividend paying stocks, we are all have various hats – our consumer hat, investor hat and the list goes on. Sometimes what we want as a consumer and what we want as an investor are a little different. As a consumer besides great service and comfort we like lower prices as an investor you want the company to give great service and comfort but at higher prices to ensure profitability to pay dividends. When you examine the companies as an investor, you expect to pay a higher fee, but you get some back in a dividend or higher stock prices.

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

You may read the story that because the Baby Boom generation as a whole is richer than other generations, the next generation will likely inherit billions of dollars. How that is divided among individuals is a different issue, but people will inherit something. If the town or city you were born in the property prices have gone up, likely your parents or grandparents were able to buy a house for less than $10,000 and can no sell it for something in the 100,000’s plus, that is one small example of an inheritance which is coming.

In a different look at inheritances is the book The Inheritance by Joanna Goodman published by HarperCollins, NY, 2024.The story is a lady goes to work in the secretarial pool of a large company, catches the eye of the CEO who enjoys her sexual company. The result is a child; the man dies unexpectedly in a plane crash and the woman decides to have the baby because she truly believed the man loved her. He kept her in the shadows of his life, wrote her notes and said enough nice things for her to believe. The man’s estate comes up, she petitions for a slice, but the courts rule no. The primary reason is for generations, “bastard child or children born out of wedlock” had very few legal rights. And many people who have money are not interested in good will to look after possible children. They will raise money for charities that look after people, but not directly. The law spoke of direct relations or from marriages.

The world moves on and you might remember the CSI TV series, the use of DNA for testing comes forth. It takes a few years but courts and most people believe if there is a DNA match, there is proof.the lady is now in her 40’s she tries again to get a piece of the fortune, partly because she needs it, partly because scientific progress changes things, although it takes the court system time to catch up. The book is about one of the first cases, the defense lawyer likes the old rules, the court finds one of the brothers died and left his brain for research. There was no reason to dig up the grave, the DNA was tested and came back and 98.4% agreement they are a match. The lady has genes of the late brother.

In the book, there was another case, another delay, but likely she would win something. In the past with inheritance cases, if the banks believe there will be a settlement soon, the banks can give partial payment of the funds expected as a loan.

Linking to dividend paying stocks, science has the ability to change how we see things and when it does, it will move into the court system as evidence. Of course, ever since science has been use, both sides will present evidence from people of science background to determine if the proper handling of evidence was done and so forth. One side will say yes the science helps them, the other side says the science does not, which is the reason we have courts.

In the book, the young lady led her life from early age to expect the inheritance. It took a long time because it this case, no one wants to give up money, whether they can afford it or not. If you are expecting an inheritance, hopefully you will see it as a lottery win and not live your life as the inheritance is coming tomorrow.

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

Depends on where in the economy you are, you may love Federal Reserve Chair Kevin Warsh or wish he had a replacement. The reason is Chair Warsh’s focus will be on fighting inflation. The last time Mr. Warsh was on the Federal Reserve, there was a housing crisis, the Federal Reserve Chair Hank Paulson used as many tools as he could to stabilize the banks and try to ensure the banks did not cut off credit. Mr. Warsh believed the Chair should have fought inflation.

In an article by Howard Schneideider of Reuters, every year we all believe the world has been become more complex and interrelated, and hopefully with the use of AI, the modeling should be better. However, there are now a more intense and polarized information environment, and markets accustomed to a steady diet of top policy-maker commentary.

The Fed held the rate steady in the range between 3.5% and 3.75%, where they have been operating since December.

Former Fed Chair Jerome Powell used simple factual statements such as inflation is elevated. Chair Warsh said inflation was elevated relative to the Committee’s 2% target.

The committee will deliver price stability.

Linking to dividend paying stocks, Chair Warsh should be good for investors on Wall Street because the Chair is an inflation hawk. If you expect the Fed to ease into the economy to help everyday people, the answer will be likely not. In the 1930’s inflation was low, but unemployment was high. Ideally that is not a good outcome.

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

One of the major divisions of every company is security including cybersecurity. The growth of cybersecurity continues and every year it will get bigger and more important.

In an article by Reuters, a cyber extortion group claimed to have stolen more than a terabyte of data from pharmaceutical giant Novo Nordisk and said it is going to sell parts of the data after unsuccessfully demanding $25 million from the company.

FulcrumSec, a cyber extortion group said it spent more than 2 months in Novo Nordisk’s networks stealing data. It said that data included company source code, proprietary information on released and unreleased drugs, trial data, and unreleased drugs, trial data, and unreleased drugs, trial data, employee and doctor and patient data, information related to company processing facilities and internal AI model information.

Thomas Willkan head of research at cybersecurity firm Lab-1 has closely tracked Fulcrum Sec and the hacking group is usually quite legit in terms of both their capabilities and also their claims.

Linking to dividend paying stocks, there is a quote by John Dillinger, why rob the banks, that is where the money is. The world has changed and the money is still at the banks but it is also on the internet. Cyber security is important and most of the time when cyber criminals get into companies, the news does not get into the press.

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