One of the recommendations whether to buy stock or not is to do your research. That means a great many things, but it often means not listening to a tip on a hot new stock. Doing your research means understanding why to buy, outside of making greater wealth. It is always possible that you will lose money, but if you follow the number one rule of investing, try not to lose money, then you will have greater gains than losses.

One method is to find tried and true methods and follow them. One of the more successful consulting companies is McKinsey& Company – they offer a wide range of consulting and have been doing it for many years. They follow a system and following a system gets results. The system is outline in the book The McKinsey Mind written by Ethan M. Rasiel and Paul N. Friga published by McGraw-Hill, NY, 2002.

The steps are Framing the Problem, Designing the Analysis, Gathering the Data, Interpreting the Results, Presenting your Idea. The steps are not earth shattering and but the follow the system allows time to determine what the best results for the consultant and the client is.

There are always problems to solve, the question is what is the problem or a need on behalf of the client. Once identified it can begin to seek a solution. McKinsey fact-based, hypothesis driven problem-solving process begins with framing the problem defining the boundaries and breaking it down to component parts to allow the problem-solving team to come up with an initial hypothesis as to the solution. The next step is to design the analysis, to prove or disprove the hypothesis. Once a solution has been found – communicating to the client through a structure which communicates your ideas clearly and concisely and generates a buy-in for your solution. The solution will then need to be managed and implemented with a dedication of sufficient resources and the backing of leadership.

Framing the Problem

McKinsey uses structure to problem-solve. The term MECE or Mutually Exclusive, Collectively Exhaustive means separating your problem into distinct, nonoverlapping issues while making sure that no issues relevant to your problem has been overlooked.

At the same time do not try to reinvent the wheel, use frameworks to help visualize the outlines of many common business situations remembering all clients are unique.

Use logic trees.

Hypothesis – having reduced the problem to its essential components through the use of appropriate frameworks, you are ready to embark on the next step forming a hypothesis as to its likely solution.

A hypothesis comes and then use an issue tree to determine if the hypothesis is true or false. Being skeptical is good at this junction.

Designing the Analysis

You may think you have the answer to the problem, but you have to prove it.

Find the key drivers which most affect the problem and focus on those.

Look at the big picture

As you do the analysis a work plan is needed

your initial hypothesis to the answer

the analyses that must be done to prove or disprove the hypothesis

the data necessary to perform the analysis

the likely source of the data

a brief description of the likely end product of each analysis

the person responsible

the due date for each end product.

Update it,

Gathering the Data

the internet makes it easier to gather data

Part of the gathering of data is interviewing the client’s people.

Follow the Scouts motto BE PREPARED – you are there to listen and always write a thank you note

Linking to dividend paying stocks, if you have a method to do your homework, that means it takes time and resources before you make commitments, you lose less money. The other reason to do your homework is if you are correct, when you take profits? if you are wrong, when do you sell out of your position? Those questions are often hard to answer, because if you invest to make money when do you sell? You need a framework to best answer the questions.

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

Every industry has a national organization and one of the functions of the national organization is bring together at least once a year for a conference. The largest players are represented as well as suppliers to the industry. An example of a conference is in January is the Consumer Electronics Conference in Las Vegas where companies introduce the new technology which can change the world. Similar conferences happen around the country – often the largest ones are in New York or Las Vegas.

In an article by Kim Bhasin and Sophia June of the New York Times News Service, the National Retail Federation is held in New York and brings together those companies where America shops.

This year the keynote address was Google CEO Sundar Pichai and Walmart CEO John Furner talking about AI. They spoke about a future where AI will drive the entire shopping experience, guiding consumers from the moment they began searching for what to buy all the way to the checkout.

Hundreds of startups are also vying for the attention of those retailers, aiming to capture their most granular of their needs. There are AI startups that offer in-store cameras that can detect a customer’s age or gender, robots that manage shelves on their own, headsets that give store workers access to product information in real time.

No retail buzzword has become more pervasive than agentic. It refers to the autonomous bots that guide shoppers through a purchase, helping them research products, find deals and check out. Companies have given these new companions names. Walmart AI shopping assistant is called Sparky, Amazon is called Rufus, Ralph Lauren is Ask Ralph, 7-Eleven is called Rita.

Among the other businesses that presented their latest AI at the event: Applebee’s, IHOP, the Vitamin Shoppe, Urban Outfitters, Rag & Bone, Kendra Scott, Michael Kors, and Philip Morris.

LVMH, the world’s largest luxury retailer, uses AI to boost creativity among its designers, helping them to explore materials, helping them to explore materials, test colors, and visualize final products.

Linking to dividend paying stocks, all large companies go to conferences and help explain their long-term outlook. Doing your homework through reading or possibility attending national conferences. If you agree with the outlook, then the stocks can be long-term holds.

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

It is often talked about, how large profitable companies have lobbyists in Washington, but they are often behind the scenes to make changes, but the changes do not affect the way most consumers of the product see. Once in a while, a company does it in the open for all to see.

In an article by David Yaffe-Bellany of the New York Times News Service, a major cryptocurrency bill was headed for a committee vote on in mid January after months of negotiations, a critical step in the legislative process.

Then came a social media post from the top executive of Coinbase Global Inc, the largest US crypto company. The post said Coinbase unfortunately could not support the bill as written. The bill would make the situation worse than the status quo. We would rather have no bill than a bad bill.

The vote in the Senate was cancelled.

For months, congressional staff had worked on the Clarity Act, a nearly 300 page bill designed to establish a regulatory framework for virtually every aspect of crypto, with rules the industry helped write. Brian Armstrong, the CEO of Coinbase objected to proposed language that threatened to outlaw one of Coinbase’s products and said the bill would assign to much authority to the SEC or Securities and Exchange Commission.

The crypto industry has spent over $130 million on a network of political action committees (PACs) to influence races in 2024, aiming to elect pro-crypto legislators.

Coinbase has been operating since 2012, was sued by the SEC in 2023. With the election of President Trump and his sons going into the business, the SEC dropped the lawsuits. The industry then pushed for regulation and the Clarity Act was going to be the regulatory body’s rules.

Over the past year, banking lobbyists pushed for language that would prevent crypto exchanges from paying interest to people who own stablecoins.

The most recent draft was supposed to go to the Senate for a markup or allowing amendments to the bill. The bill will come back later.

Linking to dividend paying stocks, one of the expense is either lobbying government directly or indirectly through trade organizations. On the agenda of the senior management is to ensure the interests of the company is well known to law makers at both in the home state and in Washington. As an individual you might make donations to political parties, but if the company you invest in makes donations, it wants something back in return.

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

Every industry wants government assistance either directly or indirectly by allowing the companies to do what they do without a great deal of interference. Government through the politicians often have other priorities in order to win votes or show a position that they are not 100% with the industry.

In an article by Ken Sweet of the Associated Press, Wall Street has generally benefited from the Trump administration policies. President Trump signed the One Big Beautiful Bill he gave Wall Street companies significant tax breaks, for the banks the President has pushed deregulation.

But everything is never perfect. The President has proposed a one year 10% cap on credit cards. The industry can be and is a lucrative business for many financial institutions. The President has also gone have the Fed to cut interest rates as opposed to allow the Fed to operate with little political interference.

Bank of New York CEO Robin Vince told reporters that going after the independence of the Fed does not seem to use to be accomplishing the administration’s primary goal of affordability.

JPMorganChase CEO Jamie Dimon said he has enormous respect for Jay Powell and would not want his job.

In terms of credit cards, the average interest rate on the credit cards is between 19.65% and 21.5%. A cap of 10% would likely cost banks roughly $100 billion in lost revenue each year the cap is on. according to researchers at Vanderbilt University. The banks have indicated they will fight the cap, with the resources of the banks.

Linking to dividend paying stocks, owning financial institutions such as banks and credit card companies as long as the loan losses remain very manageable has been a very good investment to hold and collect dividends from. Removing $100 billion would lower profitability and the potential of dividend increases. Sometimes government helps, sometimes it does not.

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

Many years ago, there was a commercial on the Super Bowl of a man throwing a javelin at a computer. The computer represented IBM or the establishment. The man throwing the javelin represented Apple or independence or non-establishment. IBM and Apple should never meet, but things change.

In an article by Zaheer Kachwala and Aditya Soni of Reuters, Apple will use Google’s Gemini models for its revamped Siri coming later this year under a multiyear deal that deepens the tech giaints’ alliance in the AI race and bolsters Alphabet’s position against OpenAI.

Google’s technology already drives much of Samsung Galaxy AI, the Siri deal unlocks a large Apple base of 2 billion active users.

Gemini and OpenAI were bidding on the same contract. OpenAI owns ChapGPT which was rolled out to Apple’s Siri in late 2024.

The latest agreement builds on a years-long partnership that makes Google the default search engine on Apple devices- a lucrative arrangement that drives traffic for Google which generating tens of billions in annual revenue for Apple.

Linking to dividend paying stocks, while brands try to give each of us an image of who we want to be or are, the reality is we are all interconnected behind the scenes. Thise interconnection is often outside of the limelight but where money is made. The consistent, the dependable, the profit making for investors. When you find them, you can hold onto the companies for a long period of time. In the words of Jim Cramer of Mad Money, hold them do not trade them.

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

If you ever bought something online and most of us have, it was much easier to do if you have a credit card. The credit card world is dominated by VISA and Mastercard, along with Amex. Many years ago when VISA and Mastercard came out, banks only issued one or the other, but things changed and now banks can issue both cards. The President decided that in the name of affordability, he wants to a 10% cap on credit card rates.

In an article by Ken Sweet and Seung Min Kim of the Associated Press, some background information was given. About 195 million people had credit cards in 2024 and were assessed $160 billion in interest charges, according to the Consumer Financial Protection Bureau. The debt on the credit cards was $1.23 trillion according to the New York Federal Reserve statistics.

The average rate of a credit card is between 19.65% and 21.5%, according to the NY Fed. A decade ago, the average rate was 12%.

Credit card companies make their money 3 ways: fees charged to merchants, fees charged to customers and the interest charged on the balance of the card after the 30 day period has expired.

Credit card debt is unsecured, which means a customer does not have to pledge assets against the debt, ie a mortgage is secured by the value of the house. Between 25% and 50% of credit card holders actually pay off the debt at the end of the month, which means a 10% cap does nothing for them. The other customers always have debt and it goes up quickly.

The President does not have the power to change the interest rate on credit cards but Congress could and has. Department stores issue credit cards with a rate towards 30% and Congress enacted a cap on those cards, the credit card industry stripped the cards of the rewards and perks from those cards.

There is a cap on interest rates issued by credit unions which is 18% and the Military Lending Act makes it illegal to charge active-duty members more than 36% for any financial product.

Senators Bernie Sanders and Josh Hawley want interest rates capped at 10% for 5 years.

In Arkansas, interest rates are capped at 17%, the evidence points to the poor and less creditworthy being cut out of the consumer credit markets. If someone has a credit score 600 or below, likely they would not have a credit card.

One of the solutions for those cut out is the preloaded credit card, but likely the amount will only be in the hundreds of dollars. Another solution is Buy Now Pay Later cards. Something to consider is payday loans, should they be capped?

Linking to dividend paying stocks, one of the advice that Warren Buffett told students and many others – buy the credit card companies stock, do not pay credit card interest. If you look at the stock of the credit card companies, it has been a good investment. Credit card companies because they are profitable will always have politicians signally them out for some solution or other. They do remain good investments – if you can buy the stock, not paid the interest.

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

Under President Trump second term, he sucks the oxygen in the room so all the attention is paid to him. For other countries they have to react to him, but there is no rule they have to work with him. President Trump has been changing working relationships with the many countries around the world and they have slowly started to change the relationships they have with the US.

In an article by Patricia Cohen of the New York Times News Service, the European Union (EU) has given a green light to sign a trade pact with 4 South American countries to create one of the world’s largest free-trade zones connecting markets for 700 million people.

The South American countries are Brazil, Argentina, Paraguay and Uruguay.

Robert Z Lawrence, a professor of international trade and investment at Harvard University, said Mr. Trump’s policies are helping to create a world without America. In the short run, he is able to impose his will, but is he building a lasting basis on which America can interact with the rest of the world?

There are many problems with the treaty and the EU will have ratify it, but it is better than nothing. The US maybe the preferred country to work with, but reality exists.

At the same time, the US has declared South America as its zone of influence, will a free trade zone work? with the US allow it to work?

Linking to dividend paying stocks, every consumer wants options in their lives and to the extent they can get them, they will buy there. If you take the options away, what will they do? Every year the internet connects more of the world, options exist.

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

In the early part of January, President Trump used the military forces to kidnap the President of Venezuela and put them on trial in New York. What was going to happen to the rest of the country? The President suggested the oil companies were going to add to the capital expenditure plans to overhaul the Venezuelan oil industry.

To understand if this is plausible a brief history is needed. There is a massive amount of oil in the country, it is a heavier crude and some of it is in tar sands. which needs to be extracted from the ground. The multinational oil firms have a long history in the country, but in the 1980’s the politics of the country nationalized the oil industry. Chevron remained at smaller capacity, but the majority of the country’s oil wealth is destined for the national treasury. Oil giants from Russia and China because they were from communist countries have an influence the oil industry. However, because the natural resource was nationalized (the countries sued but have never been paid for their assets), the US forced the country to sell less oil than previous and have never brought up the totals to where they were. Venezuelan oil has been sanctioned and much of the selling is on the black market.

After the President of Venezuela was removed, the President of the US said the US was going to run the Venezuela at least the oil industry. The President likes to send mixed messages, he said he was going to run it for the Venezuelan people, but in the US, he is deporting them to countries around the world. No one really knows what the President means when he says he will sell the oil and then release the funds to help the Venezuelan people.

In an article by Rebecca F Elliot of the New York Times News Service, the President invited the CEOs of 15 countries to the White House to talk about his plan to spend $100 billion in the Venezuelan oil fields. It should be noted, while the President was removed, he was replaced by the Vice President and the rest of the political process remains the same. These are the same people whom the US administration believes stole the election and represent a socialist government.

In the Houston area, because of Chevron’s continuing presence in the country, there are refineries that were built to handle the heavier crude of Venezuela.

At the table in the White House were big oil companies such as ExxonMobil, ConocoPhillips, Chevron, Continental Resources and others.

ExxonMobil’s CEO Darren Woods was particularly blunt, because before Exxon would go in there would have to the correct conditions: win-win-win. The company would win from the increase production which translates into shareholders winning; the government would win from a working relationship to the company and win for the people of the country – good neighbors. The company takes a long-term relationship meaning decades and decades.

For each country, Exxon is in, there needs to be a legal framework, durable investment protections and people working for the company in the country. At the moment, in Venezuela those conditions do no exist, but the government could change, but the process will take time.

Venezuela has great assets and finding the oil is not a problem, so ExxonMobil is willing to send in a high-level team to evaluate the situation, speak to the government and work towards working in the country. At the moment, from ExxonMobil’s perspective is the country is not investable. It is noted that ExxonMobil has made large discoveries in the offshore environment with a country beside Venezuela or Guayana.

President Trump was not happy with the answer.

Consulting energy firm Rystad Energy did projections and believed raising the production from to several hundred thousand barrels a day within the next 2 years is doable with a modest cost. But raising the output above 1.4 million barrels a day would require $140 billion between now and 2040.

Chevron expects to increase production in Venezuela by 50% over the next 2 years.

It should be noted while Venezuelan has the world’s largest oil reserves, its production is less than 5% and needs major infrastructure investments to boost output, along with no sanctions from the US.

Linking to dividend paying stocks, President Trump is acting like a stock promoter for the oil industry and while everyone sees potential there is also reality. For dividend paying companies, they need to focus on the long-term consistent profits, not the short-term gain. If you own a company which begins to sound like junior companies it is time to find other companies to invest in.

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

Last year, one of the biggest mergers announced was Netflix $82.7 billion offer to buy Warner Bros Discovery. It turned out that there were other companies interested in Warner Bros and the newest company on the block Paramount Skydance had ambitions.

In an article by Aditya Soni, Harshita Mary Varchese and Dawn Chmielewski of Reuters, the Board of Directors originally announced that the Netflix offer was superior to Paramount Skydance. The executives at Paramount Skydance went back and came up with even more money. The deal is worth $108.4 billion and includes a personal guarantee by Larry Ellison for $40 billion. Mr. Ellison made his fortune through Oracle Corp and is the father of Paramount Skydance CEO David Ellison.

Paramount is offering $30 in cash, while Netflix is offering $27.75 shares of both cash and stock. Paramount offer expires January 22, but it could be extended.

In the world of selling a house, there is comparison between houses to come up with a competitive price. In the corporate environment, sales of similar companies are used as comparison. Recently Comcast spun off divisions similar to what Warner Bros holds. The new company is called Versant Media Group and includes digital assets and TV channels such as CNBC. The stock is down since the IPO. Paramount says if Netflix spins off a division similar to Versant, the cash portion of their offer falls from $23 a share to $20 a share.

While Paramount SkyDance offer uses debt, Netflix deal requires no equity financing and is backed by $59 billion in debt from banks such as Wells Fargo, BNP Paribas and HSBC Holdings.

Media is a regulated environment and whoever wins will face some or lot of regulatory feedback. Paramount SkyDance suggests it will have fewer regulatory concerns.

Linking to dividend paying stocks, all companies have a price to be taken over and some will never be, but offering more is extraordinarily helpful. What is more and what will shareholders do with the stock. Will they take the money and leave the sector? will they switch to other companies in the sector? how attached are they to the particular company? Answering these questions gives an indication of how shareholders will vote.

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