In the old story about King Midas – he loved gold so much that he wished for and was granted that everything he touch would turn to gold. This power was great when he touched his plates, his bed, his throne but became too much when he touched his daughter and could not eat because they turned to gold. The Midas story will be with us as long as our economies are based on money and the desire to have more. One of the great writers of the late 1970’s to 2000 was Anthony Sampson and one of his books is called The Midas Touch published by BBC Books and Hodder & Stoughton, London, UK , 1989. In the book and there is a TV series, Mr. Sampson explores money and people. Fortunately for us readers, Mr. Sampson knew many of the leaders of companies and countries and he gives an excellent analysis of how money makes the world go round.  For a variety of situations, you could easily change the country name and the situation would be the same as the time when Mr. Sampson was writing.

One could easily change the greenmailers for the hedge fund kings; the influence of Japan for China; and countries awash in debt have grown. We know in general, that people will strive to accumulate and sometimes it will be good (borrow with relatively inexpensive money) till it becomes bad (repay with expensive money). Fortunes will be made and fortunes will be lost and headlines will be seen of the business pages.

Linking to dividend paying stocks, if your company can stay profitable during the economic cycles, it stands to reason that opportunities can be taken advantage of during the economic cycles. During the relatively easy money, credit can be used to enhance returns; and during the expensive cost of credit; divisions of companies can be bought as the parent has to sell to pay the debts. To maintain this balance, a company has to be profitable and prudent – two easily found variables in dividend paying companies. If the companies are profitable enough to pay its dividends, then it should be profitable enough to take advantage of opportunities.

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